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The rising cost of motoring

The rising cost of motoring

Category: Car insurance

Updated: 30/03/2017
First Published: 30/03/2017

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Running a car has never been particularly cheap, yet recently the costs have been really ramping up, thanks in no small part to ever-increasing petrol and car insurance prices – and research shows that many are being forced to cut back on driving as a result.

Putting the brakes on driving

According to Consumer Intelligence, 34% of car owners have already cut back on driving, a figure which rises to 42% of London drivers. This is due to a combination of rising petrol prices, road tax increases and the rising cost of car insurance, said the market research firm, with average premiums currently rising at a rate of 9.3% a year.

Things could only become more pressured in the months ahead – car insurance premiums are set to ramp up further thanks to the rate of insurance premium tax (IPT) rising again in June and new Vehicle Excise Duty rules, not to mention the recent legislation which changes the way certain claims are calculated.

Perhaps unsurprisingly, 43% of car owners are concerned about the rising cost of motoring, with 17% admitting that they're very concerned, yet that doesn't mean they'd be willing to put the brakes on entirely. Indeed, just 11% of respondents said they'd consider giving up driving if the cost rose by £500 a year, and even a £1,000 rise would only deter 29%, showing how keen drivers are to stay on the road – almost at any cost!

Ramping up

Unfortunately, these kind of increases may not be outside the realms of possibility, with many drivers already planning to spend more on everything from car insurance to maintenance over the next year: 55% expect to pay more for fuel, while 45% expect their insurance bill to increase, 32% believe the cost of maintenance will rise, and 29% expect a higher road tax bill.

"The financial squeeze on motorists is tightening and is only going to get worse," said Ian Hughes, chief executive of Consumer Intelligence. "Rising fuel prices were a major contributor to inflation jumping to its highest level for three years, but that is not the only price pressure drivers face.

"Insurance premiums are climbing, thanks in part to increases to Insurance Premium Tax which has doubled in less than two years, and on top of that there are road tax changes and the general cost of maintenance. Despite all that, it seems the love affair with the car is still going strong, with most drivers willing to shrug off increases of up to £1,000 a year."

Cut the costs

While it may seem that the days of cheap car insurance are coming to an end, there are things you can do to cut the cost of motoring, from being efficient with your driving to carpooling with friends and family. Be on the lookout for fuel discounts, too, and make sure to compare car insurance quotes thoroughly before you automatically renew – this can be one of the best ways to keep your costs to a minimum, and our quote tool will be a great place to start.

Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.

 
 
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