Can motorists keep on moving as costs continue to rise?

Rising petrol prices, looming fuel strikes and the imminent rise in car insurance is posing a serious threat to UK motorists as the cost of driving rises sharply.

It’s quickly becoming increasingly difficult for drivers to keep up with the costs of running a vehicle in the UK. A growing number of them are trying to seek alternative ways to bring down costs whether they’re downgrading or hanging up the keys for good.

One way you could try to reduce your costs is by shopping around for the best car insurance deal on the market, this could save you hundreds of pounds each year.

Car Insurance

Car insurance is just one of the many issues that drivers face. The European Commission has banned gender ruling when it comes to insurance products. What this means for drivers is that their sex will no longer play a part in distinguishing insurance costs. The new regulations have not come into force yet, so there is still time for men and women to find a better deal.

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Women typically have lower insurance premiums than men because the majority of providers see that women are less likely to make a claim on their insurance.  Statistically, men (particularly young men) are more likely to damage their vehicle and make a claim on their insurance.

Whilst many may think that the new ruling means that insurance premiums will be lower for men, as they are brought to the same standard as they are exist for women currently, this is not the case. In fact, the regulations will see a certain equality develop when it comes to insurance premiums.

From the 21st December, gender will no longer be a deciphering factor in insurance polices.

Insurance firms have been given several months to make the changes, some of which will come into place before the deadline. However, as a result their will have been an excess in admin fees which consumers will have to absorb as insurance firms push up prices to cover the changes. This means that any potential falls in terms of insurance premiums for men will be largely insignificant.

Breakdown Cover

Research from supermarket chain Asda has recently found that a staggering 8 million cash-strapped drivers can no longer afford breakdown cover. Almost a quarter (22%) of them are struggling to keep costs down and, as a result, are turning their backs on breakdown cover. Of those who can’t afford the insurance, one in four (28%) claim that the rising cost of keeping their car on the road has made it simply too expensive.

Kirsty Ward, Head of Financial Services at Asda, said: “The cost of running a car is soaring, rising insurance premiums and petrol prices are hitting people hard.

“With so many cars expected to be on the road over the Bank Holiday weekend, we are urging all drivers to make the appropriate checks before travelling to ensure they avoid those unbearable breakdown delays and expensive callout charges.”

Fuel duty

Chancellor George Osborne announced in the 2012 March Budget that he plans to increase the fuel duty tax by 4 pence.

Not only has this caused fury amongst motorists who are already struggling to cope with rising costs, but motoring groups have also spoken out about the plans, going as far to say that the government is preventing economic growth.

The Road Haulage Association (RHA) Chief Executive, Geoff Dunning, commented on the situation:

“The barrel price of oil now stands at its lowest for quite some time. In addition, exchange rates are holding up well.”

Despite this, forecourt prices are still too high, with the margin on diesel having risen from 3.48ppl in March to 7.65ppl today. This is an increase of 123% or more than the August duty rise. Users of petrol and diesel fuels are desperate to see a reduction in fuel duty.”

Motorists were in anguish only a few months ago as petrol prices hit record highs, with the average price of petrol reaching 137.44p per litre. Since then it has dipped.

The average price of diesel reached an all time high, rising beyond 144.67 pence per litre. It may come as no surprise that a number of motorists are considering ditching their cars; only two years ago the average price of petrol was 112.03p per litre.

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Posted by: WarrenWilson Categories: Finance Tags: Comments Off on Can motorists keep on moving as costs continue to rise?

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