Rise of motoring costs stalls

June 9, 2014 | By | In News

The cost of keeping your car running is in decline, according to a new study by the AA.

Beleaguered UK motorists are likely to welcome the news, which is largely thanks to a reduction in insurance premiums and a stall in the upward march of fuel prices.

The motoring organisation calculates that owners of a petrol car worth no more than £13,000 are now paying around £1,913 per year to keep it on the road – some £379 less than a year ago.

Owners of more expensive cars saw greater savings, with those running a car worth £25,000 saving on average £1,262 compared with last year.

“Owning a car over the past five years has been full of huge peaks and troughs in prices. This year the storm seems to have abated."

The main area in which money is being saved is in insurance premiums, which have fallen by an average of 17 per cent over the past 12 months. This has been attributed to a crackdown on insurance fraud, particularly relating to crash-for-cash compensation scams.

Speaking to the Daily Mail, Association of British Insurers director general Otto Thoresen said: “We applaud the decision to ban the distasteful advertising which offers cash or other inducements for personal injury claims. This only serves to reinforce to unscrupulous claimants that there is a compensation culture to exploit.

“These changes are a very positive development for the vast majority of honest insurance customers who end up paying for the fraud of the minority.”

Further savings have occurred because of reductions in the prices of car parts and servicing, as well as a slowdown in the rise of fuel prices.

However, bills are likely to rise for some drivers, as recent Budget announcements increased the cost of VED (Vehicle Excise Duty) for some cars, as well as the London congestion charge increasing from £10 to £11.50 today.

Drivers with more expensive cars are most likely to be worse off according to the AA’s report, with those driving a car worth around £32,000 likely to pay around £150 more in road tax compared with last year.

An AA spokesperson told The Telegraph: “Owning a car over the past five years has been full of huge peaks and troughs in prices. This year the storm seems to have abated.

“Three main factors determine the cost of owning a car: fuel, insurance and resale value. All are down on last year, but the falls in fuel and insurance have been dramatic.”

Have you seen a reduction in your motoring costs this year? Have your say below.

Picture: Fotolia

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