UK motorists are facing an increase in the cost of car ownership, and one expenditure is largely to blame.
A report from The Green Insurer reveals that annual running expenses related to operating a vehicle have risen to £2,585 this year, marking an 8% rise, or an additional £197, compared to £2,388 in 2023, attributable primarily to escalating insurance premiums.
Despite a minor decrease in petrol prices leading to a slight reduction in fuel costs, which accounts for 39% of total running expenses, down from 42% the previous year, this relief is overshadowed by a significant increase in insurance costs. The average insurance premium has skyrocketed by £147, now constituting 27% of all running costs, up from 23% in 2023.
Other notable expenses for car owners include car repairs and servicing, accounting for 17% of the total, followed by road tax at 8%.
|
Costs associated with running a car |
Estimated cost in 2023 |
Estimated cost in 2024 |
YOY change (£) |
YOY change (%) |
|---|---|---|---|---|
|
Unleaded petrol |
£1,005.58 |
£1,001.72 |
-£3.86 |
-0.38% |
|
Insurance |
£543.00 |
£689.70 |
£146.70 |
27.02% |
|
Accessories and fittings |
£16.35 |
£17.25 |
£0.90 |
5.50% |
|
Spare parts |
£114.44 |
£120.74 |
£6.29 |
5.50% |
|
Other motor oils |
£5.81 |
£5.92 |
£0.11 |
1.90% |
|
Repairs, servicing and other work |
£399.84 |
£433.03 |
£33.19 |
8.30% |
|
Motoring organisation subscription (e.g. AA and RAC) |
£17.69 |
£18.61 |
£0.92 |
5.20% |
|
Garage rent and other costs (e.g. car washing) |
£36.98 |
£35.24 |
-£1.74 |
-4.70% |
|
Parking fees, tolls, and permits |
£36.00 |
£39.14 |
£3.13 |
8.70% |
|
Anti-freeze, battery water, cleaning materials |
£5.81 |
£5.92 |
£0.11 |
1.90% |
|
Motoring fines |
£6.00 |
£6.52 |
£0.52 |
8.70% |
|
Motor vehicle road taxation payments less refunds |
£200.49 |
£210.92 |
£10.43 |
5.20% |
|
Total costs |
£2,388.00 |
£2,584.70 |
£196.70 |
8.24% |
In light of these rising costs, additional findings from The Green Insurer indicate that 15% of drivers are contemplating giving up driving within the next year due to financial pressures. Over half of the car owners surveyed expressed significant concern over increasing insurance premiums, with 51% worried about the need to cease driving and dispose of their vehicles.
The high cost of insurance is also delaying new drivers from getting behind the wheel, with 14% waiting up to three months, and another 16% postponing for up to five years before they can afford to drive their own cars.
This increase in expenditure is also changing the mindset around driving in the UK. Separate research from The Green Insurer revealed that 50% of drivers surveyed reported a reduction in their monthly mileage, with 22% indicating a substantial decrease.
“The cost-of-living crisis has tightened its grip leaving households across the country desperate to ease the squeeze. Our analysis shows that motorists are now paying around £200 a year more to keep their cars on the road, as insurance premiums continue to pick up pace, prompting drivers to adopt a range of cost-cutting measures,” CEO Paul Baxter said.
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