How Switching to a One Car Household Could Save You More Than £1,500 a Year

The two car family is quietly becoming a thing of the past. New research suggests more than a third of UK drivers have cut the number of vehicles they own in the last two years, and those who have downsized to a single car are saving an average of more than £1,500 a year. With running costs climbing across insurance, repairs and fuel, growing numbers of households are deciding that a second car simply does not earn its keep, and many are putting the money straight into savings or everyday bills instead.

The numbers behind the shift

The findings come from research by temporary insurance provider Tempcover, paired with an analysis of government vehicle data. It found that almost one in four households, 36 per cent of drivers, said they had reduced the number of vehicles they own during the past two years. Single car households now outnumber multi car homes by 10 per cent, with 44 per cent of UK households running just one car compared with 34 per cent that keep two or more.

The savings are the headline. Drivers who downsized to a single vehicle reported keeping hold of an average of £1,533.24 each year, money that previously disappeared into the cost of taxing, insuring, maintaining and fuelling a car that was often sitting idle. More than half of those who made the change, 57 per cent, said they were financially better off afterwards. Of those, 41 per cent put the money saved into savings and investments, while 34 per cent needed it to cover everyday spending.

Why families are giving up the second car

The reasons drivers gave were a mix of practicality and pressure on the household budget. Around a third (32 per cent) said they simply no longer needed more than one car, while 26 per cent pointed directly to affordability. High maintenance and repair costs persuaded 18 per cent to give up a second vehicle, and 16 per cent said they were trying to reduce overall household spending.

The pandemic still casts a long shadow over how Britain drives. Some 39 per cent of those surveyed said they drive substantially less than they did before 2020, and 13 per cent of those who downsized cited the shift towards working from home as a factor. When commuting five days a week stops being the norm, the case for a dedicated second car for one member of the household weakens quickly.

The research also hints at a longer term change in attitudes. Almost a quarter of drivers, 23 per cent, said they planned to move away from car ownership altogether over the next few years, leaning instead on car sharing apps, car clubs or temporary insurance for the occasions when they actually need a vehicle. As Tempcover chief executive Paul Gilshan put it, households that have downsized find that one car works well, they are better off financially, it fits how they live and work now, and they tend to be more intentional about when they use it.

How much a second car really costs

The £1,533 average saving makes sense once you add up what a second car costs before it has turned a wheel. A typical second vehicle still needs its own insurance policy, vehicle excise duty, an annual MOT once it is three years old, servicing, tyres and breakdown cover. Even a older, low value runabout that is paid for outright can easily cost several hundred pounds a year in fixed costs alone, and that is before fuel, parking permits or the slow drip of depreciation.

Insurance is often the biggest single line. While some insurers give a small multi car discount, running two separate policies almost always costs more than one, particularly for younger or newly qualified drivers in the household. Add a second set of tyres every few years, a second MOT and service, and the occasional unexpected repair bill, and a rarely used second car can quietly swallow well over £1,000 a year that delivers very little in return if the vehicle spends most of its time parked.

Depreciation is the cost drivers most often forget. A car loses value whether it is driven or not, so a second vehicle that only comes out at weekends is still falling in value every month it sits on the drive. For many households, that combination of fixed costs and steady depreciation is what tips the balance towards selling up.

To put the running costs in context, recent industry estimates have put the all in annual cost of keeping a car on the road in the UK at several thousand pounds once insurance, fuel, tax, servicing, tyres and depreciation are added together. A second car does not cost as much to run as the main family vehicle if it covers far fewer miles, but the fixed costs that apply regardless of mileage, insurance, tax and the annual MOT and service, are largely unavoidable. That is why a low mileage second car can look so poor value: you pay much of the cost of ownership while using only a fraction of the benefit.

It is worth doing the sum for your own household rather than relying on averages. Gather a year of fuel receipts or card statements, your insurance renewal, the last MOT and service invoices and your road tax, then divide by the number of journeys that truly required a second vehicle. Many drivers are surprised to find each of those trips is effectively costing them tens of pounds once the fixed costs are spread across them.

What to think about before you sell

Before letting a second car go, it helps to work out realistically how often it is really used and what it would cost to cover those journeys another way. Add up the days each year when two cars are actually needed at the same time. If that number is small, the maths usually favours downsizing, especially once you factor in the saving on insurance, tax and upkeep.

For the occasional clashes, there are now several alternatives to owning a second vehicle outright. Temporary insurance lets a family member borrow or hire a car for a day or a week when they need one, car clubs offer pay as you go vehicles by the hour in many towns and cities, and a well planned shared calendar can often avoid clashes altogether before they happen. Public transport, cycling or lift sharing can fill the gaps for shorter or predictable trips.

If you do decide to sell, remember to tell the DVLA so the vehicle is properly transferred and you stop paying tax and insurance on it, and claim any refund due on the remaining road tax. If you intend to keep the car but take it off the road for a while rather than sell immediately, a Statutory Off Road Notification (SORN) stops the tax and insurance clock while you decide. It is also worth checking whether keeping the car on your existing policy as a named second vehicle, or moving to a single more flexible policy, leaves you better off.

The wider picture is that the rising cost of running a car is changing long held habits. For decades, two cars on the drive was seen as the natural shape of a working family. The new figures suggest that, faced with stubbornly high motoring costs, more and more households are deciding that one car, used more thoughtfully and topped up with flexible alternatives, leaves them with money in their pocket and very little real inconvenience. For some, the shift is temporary while budgets are tight; for others it has become a permanent change in how they think about getting around. You can read more on how the cost of owning a car has climbed at Motoring Chronicle.

Sources:

• https://www.motoringresearch.com/car-news/motorists-single-car-households/
• https://www.tempcover.com/temporary-car-insurance