Thursday, November 25, 2010

Increased cost of driving in UK twice rate of inflation; 2011 VAT increase "likely to take us into a new era of record petrol prices"


RAC has issued its Cost of Motoring Index 2010 for car ownership in the UK:

The average annual cost of owning and running a new car has jumped by 6.3% in the last 12 months, according to RAC's annual Cost of Motoring (CoM) Index.  The £346 increase, which is twice the rate of inflation, takes average costs up to £5,869 from £5,523 in 2009. This equates to £112.87 per week or 48.91p per mile.
The Index addresses the costs of owning and running a new car and includes fuel, insurance, maintenance, road tax, breakdown cover, depreciation and finance.
In addition to the overall costs, the Cost of Motoring Index also focuses on the day-to-day running costs by stripping out both depreciation and car finance. New car running costs have increased by £197 (8.9%) to £2,417. This figure is up from £2,219 in 2009 and equates to a weekly cost of £46.48 – an increase of £3.79 per week.
Overall, it now costs an average of £736 more to own and run a car than it did before the onset of the recession and financial crisis in 2007.

The full Index can be read here.

The report provides fodder for motoring advocates who are decrying the coalition government's fuel tax increases - a fuel duty escalator of 1% over inflation and a January 2011 VAT increase.  RAC's Adrian Tink said, "Motorists will continue to be hit hard in the New Year with the additional rise in VAT to 20%. This is likely to take us into a new era of record petrol prices, which is why it is vital the Government takes a close look at the issue to help end the war on motorists’ pockets," a reference to the Conservative-Liberal Democrat government Transport Secretary Philip Hammond's promise in May that "We will end the war on motorists."

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