Cost of motoring soars by 6.3% as drivers feel the pinch

Article date: 24 November 2010

  • Rising fuel costs account for a third (33%) of the £346 annual increase.

The average annual cost of owning and running a new car has jumped by 6.3% in the last 12 months, according to RAC’s annual Cost of Motoring (CoM) Index¹. The £346 increase, which is twice the rate of inflation², takes average costs up to £5,869 from £5,523 in 2009. This equates to £112.87 per week or 48.91p per mile.

The Index addresses the costs of owning and running a new car and includes fuel, insurance, maintenance, road tax, breakdown cover, depreciation and finance.

In addition to the overall costs, the Cost of Motoring Index also focuses on the day-to-day running costs by stripping out both depreciation and car finance. New car running costs have increased by £197 (8.9%) to £2,417. This figure is up from £2,219 in 2009 and equates to a weekly cost of £46.48 – an increase of £3.79 per week.

Overall, it now costs an average of £736 more to own and run a car than it did before the onset of the recession and financial crisis in 2007.

High fuel prices continue to hurt motorists
A key contributor to this year’s rise in the cost of motoring has been the unwelcome return of record high fuel prices. The cost of fuel for the average motorist has escalated £116 (9.8%) to £1,300 per year. 

Both diesel and petrol car owners have witnessed inflation busting increases at the pumps of 14.8% and 12.6% respectively. However, the Index has identified one small crumb of comfort for new car owners with an improvement in fuel consumption of 2.7% -slightly offsetting the steep rise in fuel prices.

RAC motoring strategist Adrian Tink commented: “Rises in the cost of motoring for Britain’s 34 million drivers shows no sign of ending. Owning a car is a necessity for most people but they’re once again being hit in their pockets – this time by an increase in costs which is double the rate of inflation.

“Fuel continues to be a major contributor in the rising costs, with little being done to control the spiralling prices at the pumps. It’s time for the Government to look closely at the problem and take action, starting by cancelling the planned fuel duty rise of 0.76p in January 2011.

 “Motorists will continue to be hit hard in the New Year with the additional rise in VAT to 20%. This is likely to take us into a new era of record petrol prices, which is why it is vital the Government takes a close look at the issue to help end the war on motorists’ pockets.”

Used Cars
Overall, used cars continue to be considerably cheaper to own than an equivalent new vehicle. The ownership cost of a used car is now £4,441 or £85.41 per week. This figures is £1,428 (24%) cheaper than for a new vehicle. Year-on-year, despite increases in fuel, insurance and maintenance costs, there has actually been a small reduction (£18) in used cars costs since 2009. This is explained by the fact that depreciation on used cars fell 14.2% in 2010 as a result of prices in the used car market falling from the 2009 highs.

When looking at the running costs, used cars are actually £553 more expensive to run than new cars. This is primarily due to maintenance costs which are considerably higher (£437) because of the added wear and tear on older vehicles. Also, fuel consumption is worse and insurance is more expensive on older vehicles.

-ends-

 

For further information, please contact:

John Franklin: RAC Press Office, 01603 680 795, john.s.franklin@aviva.co.uk

Adrian Tink: RAC motoring strategist, 01603 681 922, adrian.tink@aviva.co.uk

Dave Chambers: Hill & Knowlton, 0207 413 3155 david.chambers@hillandknowlton.com 

¹ RAC Cost of Motoring Index is based on a pool of 17 new cars and weighted by their level of ownership. Research on the Cost of Motoring Index was conducted by CAP Motor Research, Innovation Motorconsult and RAC. The data was analysed and compiled by Go-Motoring, who also consulted Parker’s Guide Target Prices, Mammoth Cars, Car And Van Deals Direct, Drive The Deal, UK Car Discount, Vans Direct, Van Discount, Van Man, Car And Van Deals Direct and petrolprices.com for research figures.

² Based on the October Consumer Price Index of 3.2%.

Notes to editors:

Cost of Motoring running cost comparison 2009–2010:

 

Consideration

New Cars

2010 - £

New Cars

2009 - £

Fuel

1,300

1,184

Insurance

483

409

Maintenance

381

366

Vehicle Excise Duty

111

114

RAC Membership

143

146

Depreciation

3,072

2,920

Car Finance

379

384

Total Cost (Per Year)

£5,869

£5,523

Total Cost (Per Week)

£112.87

£106.21

Used/new car, and used year on year comparisons: (Used cars based on vehicles three to six years old).

 

New Cars 2010 – £ 

Used Cars 2010 – £ 

Used Cars 2009 – £ 

Fuel

1,300

1,396

1,197

Insurance

483

515

472

Maintenance

381

818

787

Vehicle Excise Duty

111

99

143

RAC membership

143

143

146

Depreciation

3,072

1,040

1,213

Finance

379

430

501

Total

£5,869

£4,441

£4,459

About RAC

  • With around seven million customers, RAC is one of the UK's most progressive motoring organisations, providing services for both private and business motorists. Whether it's roadside assistance, insurance, vehicle inspections and checks, legal services or up-to-the-minute traffic and travel information - RAC is able to meet motorists' needs.
  • RAC is committed to providing the very highest levels of service to its members and has been ranked first for customer satisfaction by J D Power and Associates' UK Roadside Assistance Study for the last four years. RAC was also the top-named breakdown organisation in the July 2009, January 2010 and July 2010 half-yearly UK Customer Satisfaction Index from the Institute of Customer Service.
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* based on gross worldwide premiums at 31 December 2009

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