€10,571 - annual cost of family car
People don’t realise how much their car costs them. We tend to think of the purchase price plus petrol and insurance, but in fact that under-states it by a long way.
The AA calculates the annual cost of motoring each year including a wide range of costs including depreciation, finance, repairs and replacements, the cost of parking and a whole load of other sundries as well. That figure shows the total annual cost of running the average Band B family car at just over 10,571 euro a year - down 75 euro on last year.
The calculation makes some assumptions about a ‘typical’ driver; some will be lower mileage than our estimate of 10K per year and others will be much higher. So it can’t be definitive when it works out the cost of motoring for each individual but it is very useful as an index to track what has changed year on year.
This year the big story is that insurance is up – well up – in the last 12 months. Other costs generally fell back a bit and fuel stayed the same, so overall the annual cost actually fell a little bit. But within that there are distinct trends:
The average price of cars has fallen, which is obviously a good thing. Cars depreciate very rapidly in value and the AA calculations reflect that. If you buy a new car now and sell it in eight years it will obviously be worth a lot less. Lower priced cars means less annual depreciation.
Insurance premiums – negative impact for a second year running The average premium is up 8.5% but averages hide a lot. Some insurers are raising prices by a lot more so it is more important than usual for people to shop around.
Prices are rising for a couple of reasons. We know that crashes are up – the rising road deaths make headlines but there has also been a rise in injury and material damage accidents. There is also more traffic on the road. We see that in AA Roadwatch and we also see that this is an uneven recovery; Dublin and Cork are showing signs of life, Galway as well. Other parts of the country and especially rural areas are not recovering yet. Even so more traffic means more collisions and therefore higher prices.
The change to the rules on gender have almost completely come through now but still there are some insurers whose pricing hasn’t fully caught up. The practical effect is that you really do need to shop around.
Fuel prices have been amazingly flat this year – they have barely moved at all for the consumer. In fact there has been movement internationally but for us the changes in oil prices, wholesale prices and the exchange rate between Euro and Dollar have tended to cancel each other out.
On the bright side there is some hope of falling prices in the Autumn. Oil prices are down and there is depressed economic activity across Europe, which has left refineries with extra stock of road fuels. That may not be a long term effect and of course we have no idea what is going to happen in the middle east but for now the prospects are reasonably good.
For more information log on to www.theaa.ie
