Priced off the roads

The cost of motoring has increased by 34% more than the rate of inflation in the last decade, according to research from uSwitch.com.

UK motorists were paying £1,344 a year to insure, tax, fuel and MOT their cars. They are now forking out a wallet busting £2,395 a year - 78% or £1,051 more. If these costs had increased in line with inflation, UK motorists would only be paying £1,787 a year - £608 less than they currently are. This means that as a nation, UK drivers are spending almost £75 billion a year keeping their cars on the road, £19 billion more than they would have had to if costs had kept pace with inflation.

Consumers are already feeling the pinch from the soaring price of essentials, such as food and energy. The cost of owning and maintaining a car is no exception as the research reveals huge price hikes in the last decade. Insurance has increased by 72% or £224, the cost of fuelling a car for a year has risen the most, by 94% (or £803), and the cost of an MOT has risen 76% (or £21.69). Tax has only increased by 2% on average since 1997. If these trends continue, in 2017 motorists could be paying as much as £3,659 a year to keep their cars on the road, a staggering £305 a month.

Insurance
In 1997 motorists were paying an average annual insurance premium of £311. If premiums had just increased at the rate of inflation, drivers would now only be paying £414 a year. But, in reality, the average premium is now £535. This increase of £224 is 29% more than the rate of inflation. What’s more, there’s more price hike misery on the horizon as analysts predict insurance costs will increase by another 5% by 2009. This will see the average motorist forking out £562 a year to insure their cars.

Tax
Since 1997 car tax has only risen an average of 2%. Motorists paid an average of £150 a year in 1997 due to a flat fee for all road users. Now, due to a banded system dependent on a car’s CO2 emissions, drivers pay an average of £153 a year. However, controversial new plans to retrospectively charge increased tax on cars registered after 2001 means that, for many, this cost is set to rise. The best-selling cars in the UK will see an increase of 12% for road tax, meaning motorists will be forking out an extra £25 a year on average. Drivers of older cars may find that their road tax will cost as much as 34% of the value of their car.

MOTs & petrol
The cost of an MOT did not increase at all last year – it remains at £50. However, this is a 76% increase since 1997. If it had increased in line with inflation, the cost of an MOT should be £38.

Petrol has been a contentious area for some time now with prices changing on almost a daily basis. The cost of petrol has risen 14% in the last year with drivers now forking out £1,657 a year for fuel. This has increased by £803 (94%) since 1997. Again, if petrol had only risen by the rate of inflation, drivers should only be paying £1,136 a year for fuel - £521 less than they currently are.

Ashton Berkhauer, insurance expert at uSwitch.com, comments: “The Government has been accused of being anti-motorist and there is little in our report to persuade Britain’s drivers otherwise. The cost of petrol, insurance and servicing has soared, far outstripping the rate of inflation. Collectively, British drivers are forking out £19 billion more a year than they would have had to if the cost of keeping a car on the road had simply increased in line with inflation over the last decade.

“Consumers are feeling the pinch of the credit crunch and are contending with rising bills across all fronts. This has already had an impact on motoring. Sales of new cars fell by 13% last month, while sales of ‘green cars’ have increased 19%, as consumers realise that alternatively fuelled vehicles could save them £300 a year on running costs.

Berkhauer concludes: “The rising cost of motoring could potentially lead to more uninsured drivers on our roads and people invalidating their insurance by driving unsafe vehicles as they can no longer afford proper maintenance. For some, the increasing cost will price them off the road altogether. Some people do have other options, such as public transport, but for many, there is no other choice. We could be heading for a situation where motorists don’t have to decide if they should take their car, but whether they can actually afford to.”