COVID-19 updateWe are open for business. All transactions are completed contact-free. Find out more.

Top 10 Most Economical & Cheapest Cars To Run

There’s no getting away from the fact that cars are a significant drain on your income, from their initial purchase to tax, fuel, repairs and beyond. But some are cheaper than others, so which are the cheapest cars to run?

Do you buy a 10-year-old low mileage, low-cost banger and repair it regularly to keep it running? Or do you buy a two-year-old model and dodge the repair bills in favour of monthly finance payments?

It’s questions like this we seek to answer in this guide to the cheapest cars to run in 2020.

Reliability, MPG, repair costs and initial purchase price all contribute to a car’s economy

It’s a tricky thing to balance. Most people want reliability and hassle-free motoring so go down the newer route, but then you still must factor in the miles per gallon and how much will you be spending on fuel.

When it’s five, maybe six years old, are you going to be repairing it often? If so, then you’ll be back to the used car scenario.

We thought it would be a good idea to put together a list of some of the most economical cars to buy on the market today. We’ll look at their reliability, MPG, repair costs and initial purchase price along the way.

Our top 10 most economical cars to buy are:

  1. Kia Rio
  2. Suzuki Celerio
  3. Honda Jazz
  4. Skoda Fabia
  5. Citroen C4 Cactus
  6. SEAT Leon
  7. VW Golf
  8. Kia Picanto
  9. Peugeot 308
  10. Ford Focus

1. Kia Rio

Kia’s current Rio scores incredibly well in terms of MPG, with either a petrol or diesel engine. The 1.0 litre T-GDI turbo achieves a real-world average rating of 47.4, not bad for an engine that produces 99 bhp, it does have a rather sedate 10.3-second 0-62 time. We’ve seen worse.

This engine also pumps out just 114 g/km of CO2 meaning a first yearly tax cost of £170.

Kia Rio driving
With its incredible range and excellent warranty, the Kia Rio is great economical choice.

But then the MPG of the diesel is even more astounding, 59.9 is the average that most owners see with the 1.4 CRDi engine.

With 10 horsepower less than the 1.0-litre petrol it only emits 105 g/km of CO2, so £150 in first-year tax. However, that 0-62 time gets even worse at 12.6 seconds. You’ll also have to head over to the second-hand market to pick one of these up as Kia dropped the diesel Rio in January 2018.

Buying new will also give you a full 7-year warranty up to 100,000 miles. This is Kia’s standard warranty across their range. They’re one of the only manufacturers to back their vehicles with such extensive aftersales protection.

Even if you take five years to pay off your new car, you’ll still have a further two of full warranty available to you. That’s pretty impressive!

Overall the Rio is a reliable, economical choice, hence why it’s at the top of our list.

Price: From £13,000


  • Great all round affordability
  • Mid-sized hatchback for the cost of a high-end city car


  • Won’t appeal to badge snobs

2. Suzuki Celerio

It was possibly one of the cheapest new cars on the market when it was on sale, the Suzuki Celerio offers economy by the bucket load.

£7,999 used to get you a brand, spanking new car. Now you can only find the second hand, but that means they’re even cheaper.

You only get the choice of one engine, a 1.0 litre three-cylinder, there are two trim levels, SZ2 and SZ3, six colours and minimal dealer fit options.

Real world MPG is rated an average of 73.8, the official combined figures are only 58.8. Emissions are measured at just 89g/km of CO2 meaning £110 for the first year’s tax.

Suzuki Celerio front parked
Cheap and cheerful: The Celerio is a great option if you’re looking to save.

Sadly, Suzuki only give the standard 3 years, 62,000-mile warranty, you can, however, upgrade this once it has expired. They offer three levels, Comprehensive, Select and Basic, costing around £220, £190 and £165 per year respectively.

The Celerio is a basic car, the first market it was sold in was India before making its debut here in the UK. That means it’s incredibly cheap to own, run, maintain and repair if necessary, parts are cheap, and nothing is over engineered and costly.

As a city runabout or a short commuter vehicle, it makes perfect sense.

Price: Used from £3,000


  • Cheap
  • Plenty of power for around town


  • Basic
  • Limited spec

3. Honda Jazz

The favourite car of oldies across the UK, the Honda Jazz. But it gets the wrong stereotype, this all-new Jazz is a superb family hatchback packed with the latest infotainment, safety and technology.

It’s not really for old people

With only the i-MMD (intelligent Multi-Mode Drive) 1.5 petrol engine, you should get a real-world average of 58 MPG. Paired with an eCVT gearbox you can keep the revs down at higher speeds, but the 95 bhp is punchy enough for around town.

Only emitting 104 g/km means £150 for the first-year tax, but sadly Honda only offer a 3-year, 90,000 mile warranty. You can extend this, but the prices are pretty high when compared to other brands.

12 months is £400, 24 – £705 and 36 – £940. These can be added on up to and including cars that are 8 years old. To fully warranty your Honda for 8 years would cost you £1,690…ouch.

Honda’s have always been bulletproof in terms of reliability, so you shouldn’t need to worry. An extended warranty could well save you money, but you shouldn’t come across large bills as the cars get older. Parts are also affordable.

Price: £18,985


  • Great all round value
  • Practical second car for families


  • Old people stigma, not seen as ‘young’

4. Skoda Fabia

Potentially one of the dullest cars on the market today, the Skoda Fabia is the ‘white good’ car of choice. There’s no excitement, nothing interesting, it’s just a car to get you from A to B. It will do it incredibly well and economically too, just don’t expect to have any sort of smile in the process.

Skoda Fabia
Dull, but frugal

As with most manufacturers these days the diesel line-up has been shelved, leaving just the one option, a 1.0-litre turbocharged petrol. With 94 BHP, it can manage a staggering average of 54.3, real-world MPG. Only producing 103 g/km means the lesser rate of just £150 for the first-year tax.

Being built on the same platform as the VW Polo reliability won’t be an issue as it’s all VW underneath. Think of the Fabia as a cut-price Polo. Servicing and parts will be higher because of those VW ties, but due to that, you should have a reliable vehicle, so it’s swings and roundabouts.

Once again, you get the standard 3 year/60,000 mile warranty. Nothing special here.

Price: From £12,990


  • Cut price Polo
  • Same underpinnings as the VW but a lot less money


  • Boring
  • Basic entry level spec

5. Citroen C4 Cactus

Citroen found their French flair again with the original Cactus, while this new facelift model loses some of those quirks it’s still an affordable, economical proposition on the new and used market.

C4 Cactus
Gone are the airbumps, the new Cactus is a far cleaner design

Currently, the best performing engine in the line-up is the 1.5 litre BlueHDi diesel. Returning an incredible 67.1 MPG while only producing 98 g/km of CO2, so the Cactus slips under the most costly tax bands and will only be £130 for the first year.

Older models to look out for on the used market are the 1.6 BlueHDi diesel which achieves an admirable 61.4 MPG real world average.

Many people shun French cars for their reliability issues, but the platform the Cactus is built on is used throughout Peugeot and Citroen’s range. The Cactus, and Citroen as a brand have recently scored poorly on the JD Power survey so maybe think about extending that warranty when the time comes.

It’s worth noting that repair bills are average for Citroen’s and Peugeot’s overall, they’re a lot cheaper than Mercedes and BMW so any large bills shouldn’t be too much of a headache. Servicing is also in line with most other manufacturers.

Price: From £22,535


  • Unique looks
  • Alternative mid sized family hatch


  • That poor JD reliability score

6. SEAT Leon

While the Leon has just been replaced, the great choice of Volkswagen Group engines remain, keeeping this Spaniard relevant and frugal.

The current top MPG champion in the range is the tried and tested VW Audi Group 2.0 TDi engine, producing 114 BHP it only emits 114 g/km of nasties, pretty good for such a big family hatchback. That puts the Leon in the £210 first year tax bracket.

Real world MPG is rated at an average of 60.9, expect to get high 60’s on a long journey.

A little long in the tooth the new Leon is just around the corner

SEAT has recently streamlined their whole ordering process too, there’s now just three steps to go through and no options. So instead of getting bogged down for hours in the plethora of choices Audi give you, in a few clicks you can be configured and even purchase directly online.

As with all VW group cars you get a bog standard 3 year/60,000 mile warranty, the first two years are up to an unlimited mileage though, in case you’re a real mile muncher.

Pricing on repairs will be moderate, they share all their parts with Audi and Volkswagen so expect to pay a premium for that.

Price: From £23,935


  • Cheaper than a Golf
  • More stylish than a Golf


  • Old model, due for replacement

7. VW Golf

Essentially a carbon copy of the Leon under the skin, but the Golf holds a cache all of its own. It’s the default ‘go to’ car for anyone and everyone who has no interest in cars.

A name that’s become synonymous with quality and some would argue value for money. But starting at £20,945, you can see it costs nearly £3,000 more than the SEAT.

Golf Front On
The VW Golf is a safe choice

You can opt for the same diesel engine found in the Ibiza, but this time it’s the 1.0-litre TSI petrol that got our attention. Scoring a real-world average of 53.3 MPG it’s not to be sniffed at, it does produce 111 g/km of CO2 which just pushes it into the £170 first year tax bracket.

Unlike the Leon there are tens of options to choose from, so you can be as granular as you like. The entry-level spec is also lower than SEAT’s offering.

Then again you are paying for a reliable brand name, but is badge snobbery really a reason to go for the boring looking Golf over a slightly more adventurous looking Leon?

There’s also a new Golf just around the corner.

Price: Starts at £20,945.


  • Strong brand name
  • Value for money


  • Generic looking hatchback
  • Options can get pricey quickly

8. KIA Picanto

Kia’s new, funky little Picanto packs some serious attitude, it’s also the second Kia on this list, why? Because of the exceedingly good 7-year warranty, it simply can’t be beaten by anyone else on the market.

It’s starting price is also low, and it’s a fuel-sipper around town. A tiny 1.0-litre three-cylinder engine averages 45.9 among its owners, it does, however, emit far more CO2 (128 g/km) than segment competitors, so you’ll be paying £170 for that first-year tax rate.

Kia Picanto
The Kia Picanto is a great value car with amazing economy

Prices start at an incredibly affordable £9,895, which is only a few thousand more than the Celerio, but the Kia feels far more grown up.

In fact, inside you’d be mistaken for thinking you were in a Rio, the whole dash and infotainment system is pretty much lifted straight from its bigger brother.

0-60 is a woeful 13.8 seconds, but you do only have 66 BHP to play with. Around town, it’s more than adequate, but anything at higher, motorway speeds can become painfully dangerous.

Kia do offer a 1.25 with 83 BHP and a 1.0-litre turbo engine but expect to pay around £2-3,000 more for the privilege.

Again, parts are cheap, the Picanto is as basic as the come in terms of all the running gear so repair costs should be kept down, and don’t forget that 7-year warranty. 7 years of worry-free motoring starting at £10k? Bargain.

Price: From £9,895


  • Great looks
  • All the infotainment & tech you could need


  • Anything but the entry level model can become very expensive

9. Peugeot 308

Now it may be a little long in the tooth, but its replacement is still a few year off, making the 308 the perfect economical choice.

Pair the 308 with the fuel sipping 1.5 litre BlueHDi diesel engine and you could get up to 64.6 MPG. It also produces just 91 g/km of CO2. This is in its lower output 100 BHP form, but for around £700 more you can get the 13 BHP model which emits the same CO2 but only managed up to 62.7 MPG.

It’s always a cost vs performance argument when it comes to economy, sadly unless you get a PHEV you can’t have both.

As the 1.5 litre engine is relatively new there aren’t any real world MPG reports for it yet, but the old 1.6 litre model used to hit high 50’s with ease so expect the same from this variant

Facelifted Peugeot 308 has kept it looking fresh
It may be getting on in its years, but the Peugeot 308 offers a budget friendly alternative to a Golf.

Prices start at a rather budget-friendly £21,765, with the 308 range starting at just £21,125 its an incredible price for a diesel.

0-62 is clocked at 9.8 seconds, but thanks to the 184 Nm of torque it shouldn’t feel that lethargic.

Since the 308 was launched Peugeot have updated the exterior slightly, but the interior has seen a total refresh with a new infotainment system and other dash elements.

While it’s not as cutting edge as the likes of the Audi A3, it’s also not Audi A3 money. The 308 is still a worthy competitor compared to the VW Golf.

You do only get three years warranty with the Peugeot 308, but you can purchase additional warranty cover at the time of buying, or as long as your car is less than 3 years old and has covered under 60,000 miles.

This can either be purchased outright annually, or on a monthly basis.

Price: Starting from £21,765


  • Healthy kit levels from the start
  • As good as a Golf in terms of quality


  • Dated design
  • Lack of tech

10. Ford Focus

One of the countries favourite, go-to cars, the Ford Focus. You’ll find them on every street corner, but there’s a specific model that’s ultra frugal.

Again, it’s another 1.5 litre diesel, or EcoBlue as they’d have you call it.

With just 95 BHP the 6 speed manual version of the Focus emits 91 g/km of CO2. Ford also claim it will manage 64.2 MPG, real world owner results state a figure of 62.5 is achievable.

Kit levels are lower than in the the likes of the Peugeot 308, so the entry level ‘Active’ model is incredibly basic inside, but it means prices start at just £19,845.

Ford Focus for MPG
The Ford Focus, small, perfectly formed and smashing for MPG.

As this is an all-new model which only came out in 2018, inside is as modern as you’d expect. In entry level trim the infotainment screen is ridiculously small, but the dash layout is clean and tidy with the dials easy to read thanks to a modern blue hue.

Thankfully you can pick automatic gearboxes with any engine, something many manufacturers don’t allow you to do.

0-60 takes 11 seconds, which is on the slow side, but still quicker than the woeful 13.1 time of the 1.0 litre EcoBoost with 87 PS.

Ford have really gone to town on the handling and driving characteristics of this latest generation Focus. Even though it looks bigger than the outgoing model it feels lighter, more nimble when behind the wheel.

Opt for either ‘Zetec’ or ‘ST-Line’ and you gain the right amount of interior goodies and exterior styling for around the £22k mark.

As standard you get a 3-year 60,000 mile warranty, this can be extended to four or five years for a one-off payment.

Price: From £20,845


  • Handles great for a family hatch
  • Latest model, new to market


  • Low initial spec
  • Can be seen as a boring choice

What about economical options from the used market?

New cars aren’t for everyone, while cheap and easy PCP finance can be a tempting proposition, you are then locked into an agreement for years.

A personal loan and a second-hand car can give you far more freedom, so why not take a look at our best used cars under £5,000 article for some more affordable ideas.

Interested in a car from a different category? We have you covered with our “best of car” guides below: