Cost of motoring rises 8.6%
Sainsbury's Finance estimates that the annual cost of running a car has increased by up to 8.6% in just five months following steep increases in fuel and insurance costs. The bank calculates that the average annual cost of motoring, excluding any interest repayments on loans taken out to purchase cars, is now around £2,539; a significant increase from the £2,338 estimated by the bank just five months ago.
When compared against 2007, the increase is even more sizeable with the current total coming in at just over 20% or £438 higher than the estimated annual cost at that time of £2,100.
In addition, as of 1st April 2010, owners of newly registered cars face even higher costs than the average motorist, following the introduction of the Government's higher rate of tax for cars registered after this date. As a result they will now be paying an extra £105 on average to run their car during the first year of ownership.
The biggest cost increases in the past five months have been for car insurance and fuel, which have increased by 11% and 10%, respectively. The average car owner is now spending around £1,398 per year to fuel their vehicle. Tax meanwhile has gone up by 3.4% in the past five months and by 26% over the past two and a half years. Servicing costs have risen the least, recording an increase of just 1% over the past five months.
Sainsbury's Finance believes motorists can dramatically reduce their motoring costs by taking a few simple steps and in particular by shopping around for car insurance. As well as competitive premiums, Sainsbury's Car Insurance offers a 10% discount when you buy online.
Ben Tyte, Sainsbury's Car Insurance Manager said: "The cost of motoring has soared in recent months as all costs, but particularly fuel prices and insurance premiums, continue to rise. The cost of driving can be kept better in check by shopping around, particularly for car insurance and servicing.
"With the new higher level of tax coming in as of 1st April for newly registered cars it's also worth those looking to buy brand new cars haggling down the price to offset this higher cost."