New research, published by specialist market research agency Consumer Intelligence, appears to show what motorists have feared for many years – that keeping a car on the road is becoming ever more expensive.
Due to rising petrol and insurance costs, car owners are cutting back significantly on their time behind the wheel. The research shows that 34% of car owners have reduced their driving, a number which rises to 42% in London. Average insurance premiums are rising at a rate of 9.3% per year, which is in addition to soaring petrol and road tariff prices.
Unfortunately, there is not much good news on the horizon to ease these growing concerns. June marks the introduction of an increased rate of insurance premium tax (IPT) and when the new Vehicle Excise Duty rules are taken into account, along with planned changes to certain insurance claims, the immediate future for many car owners will be one dictated by budget.
Despite the growing cost of maintaining their vehicles, a vast majority of motorists are determined to remain active drivers. If the cost of driving rose by an annual rate of £500, only 11% of those surveyed admitted they would consider giving up. Similarly, if this cost was doubled to a figure of £1000 per year, only slightly less than a third would only be discouraged.
Chief executive of Consumer Intelligence, Ian Hughes said “The financial squeeze on motorists is tightening and is only going to get worse. Rising fuel prices were a major contributor to inflation jumping to its highest level for three years, but that is not the only price pressure drivers face. Insurance premiums are climbing, thanks in part to increases to Insurance Premium Tax which has doubled in less than two years, and on top of that there are road tax changes and the general cost of maintenance.”
Many car owners seem prepared to absorb these higher costs, according to the research. 55% of drivers anticipate they will be paying more for petrol, and higher insurance bills are expected by a further 45%. With higher maintenance and road tax costs predicted by 32% and 29% respectively, it appears that many drivers are prepared to accept the price increases to remain active on the road.