Top Ten Low Cost Cars for Contractors and Freelancers

We all know that claiming for your business mileage is a simple and effective way to reduce your tax bill. HMRC’s mileage rate is fixed at 45p per mile (for the first 10,000 miles) so, to maximize your savings, it’s definitely in your interests to find the most efficient car with the lowest possible running costs.

However, it’s a big job to work out the true efficiency of your prospective vehicle, especially if you want to consider all bases – including depreciation, road tax, insurance, servicing, fuel efficiency and all other running costs.

Fortunately, not only are Dean and I true petrol heads, we’re also pretty handy with excel, so we’ve selected ten cars, loaded their vital statistics into our spreadsheet and created the ultimate efficiency barometer, calculating the true running costs per mile for each of our chosen cars.

Here’s the result: inniAccounts’ top ten cars for contractor and freelancers:

10. 1997 Mercedes C250 D (run on used chip shop oil)

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Do you live next to a chip shop? Get friendly with the owner and you could enjoy (nearly) free motoring by filling up with used chip oil, provided you don’t mind the hassle, mess and inescapable chippy aroma.

Pros: Low purchase price, low fuel costs and plenty to choose from: a proper economy car.
Cons: Constant trips to the chip shop to keep your running costs low (not necessarily a con depending on your culinary abilities).

9. 2005 BMW M3

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You get a lot of car here for £17,000. Mind-blowing performance combined with solid the build quality that you’d expect from the makers.

Pros: Solid German engineering, great performance
Cons: Need a reasonable budget for fuel, tyres, servicing, insurance etc

8. 2010 Vauxhall Zafira 1.9CDTi Active

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Do you want to splash out £20,000 on a new car? Then the UK’s most popular MPV could be for you. But hold your breath…depreciation during the first year after purchase is £9,000!

Pros: Nearly as versatile as a Ford Transit van – what more needs to be said?
Cons: Despite the low running costs, the depreciation rate is a shocker

7. 2008 Audi A4 Avant 1.9 TDi

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A trusty estate favoured by expanding families: a popular car for good reason, but watch that depreciation in the early years.

Pros: Desirable, solid, and the envy of fellow drivers
Cons: Everybody’s got one

6. 2003 Nissan 350Z

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Love them or loathe them, you can’t deny that buying a Nissan gets you a solidly built vehicle with a silky smooth V6 engine, starting from an unbelievable £9,000.

Pros: Great car for touring or enjoying a swift drive in the country
Cons: All BMW M3 drivers will want to have a race

5. 1999 Alfa Romeo 156 1.8

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Armed with a budget of only £1000, you can get to experience an Alfa Romeo complete with the luxury of a full leather interior. One good tip though: join the AA.

Pros: Get the Alfa charm and character for knock-down prices
Cons: This model is starting to show its age (worrying when you consider they aren’t that reliable brand new)

4. 2007 Toyota Prius 1.5 Hybrid

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The hybrid is billed to be the future of motoring, and Toyota’s Prius will certainly slow you down while you try and squeeze those extra mpgs out to beat your record. Let’s hope the recalls are dealt with swiftly.

Pros: By driving one of these you’re doing the right thing for fresh air
Cons: Not that practical with a lot of the boot space taken up by batteries

3. 2003 Lotus Elise

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The frugal yet sprightly Lotus makes every drive a fun one, plus slow depreciation and low running costs make for a great ownership experience.

Pros: Will give you one of the best driving experiences ever.
Cons: Tight squeeze to get in and out, plus it can be a bit of a bone shaker.

2. 2007 Ford Focus 1.8 Sport

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The highly acclaimed Focus is adored by UK drivers because it’s practical, cheap and easy to drive; a winning combination

Pros: A great value car that’s a pleasure to drive.
Cons: People who don’t own an Audi A3 are likely to have one of these

1. 2010 Fiat 500 1.3D Lounge

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This alternative to the BMW Mini has brilliant residuals and low running costs: it may not suit the family but if you want to keep your motoring costs to a minimum, look no further. Our number one spot goes to the Fiat 500.

Pros: Fun, nimble, economical – the perfect city car.
Cons: A tight squeeze for a family of five plus the dog (or even without the dog).

How we found our top ten

We’ve had great fun researching and compiling our top ten, and the final list is based upon the following tips for finding a drivable, low cost car:

  • Watch your depreciation – this is the killer for new cars, and the reason that the Zafira costs more than three times more per mile to run than the Fiat 500, despite only a £500 difference in the annual fuel bill.
  • Buying a car with a diesel engine helps, but you’ll find it’s not essential once you account for higher purchase value and servicing costs. To make a saving with a diesel, you’ll need to be covering a large number of miles per month.
  • Buy green – the Prius and the Fiat 500 cost less than £20 to tax, plus you’re exempt from London’s congestion charge
  • There’s a price for having fun – as you’d expect, performance cars have higher maintenance and service costs