€250 Increase in Cost of Motoring in 2016

Monthly Car Insurance
  • Average cost of running a family car for a year is €10,849.42, an increase of €255.82 compared to 2015.
  • 38.6% increase in insurance premiums wipes out any savings motorists make from low fuel prices.
  • AA calls on Government and insurance industry to take necessary steps to lower insurance costs for motorists.

The average cost of running a family car for a year is €10,849.42 according to the AA’s annual survey of motoring costs. The total is a significant increase of €255.82 on the same figure for last year, according to the AA’s calculations.

For the second year in a row, a major rise in the motor insurance premiums has cost motorists dearly. Despite a large drop in fuel prices, any gains motorists make at the pumps are lost to the 38.6 per cent rise in premiums for the typical motorist.

“In a better year we could be talking about the fall in fuel prices.” Says Director of Consumer Affairs Conor Faughnan. “Drivers won’t notice though because of the enormous surge in insurance costs. The insurance crisis is particularly frustrating because much of it is unnecessary. While it is true that motor insurance was losing money a few years ago and the price had to rise a bit, there are thing that Government and the industry could do right now that would pull prices downwards.”

In some good news for motorists, fuel prices is down significantly compared to last year. The average price of petrol at 127.5 cent per litre in August is just over 11% less than it was 12 months ago. For a typical motorist in a Band B car that works out at a saving of €196.80 annually. However, they will still pay €1,554 for their year’s fuel, with tax making up more than 60% of this figure.

Each year the AA calculates average prices for each of the respective tax bands and illustrates the cost of running an average family car.  The cost of running a ‘Band B’ category1 car increased by 0.098% in 2016 when compared to the 2015 figure of €10,593.60.

Other motoring costs did not change significantly with only slight adjustments to be made due to changes in inflation and interest rates as outlined by the CSO. This is reflected in the AA’s calculation of the cost of oil, tyres, servicing, repairs, replacements and garage parking.

The AA calculates the annual cost of motoring each year using a holistic figure that includes the obvious things like fuel, insurance, servicing but also factors in a whole range of other costs. These include costs like depreciation and interest charges, as well as replacement for components such as tyres etc over the car’s life. The figure assumes a motorist that buys a new car and retains it for 8 years at an average annual mileage of 16,000 kms. All repairs, replacements and servicing are carried out as per manufacturer’s recommendations.

The full details of the AA’s Cost of Motoring analysis for 2016 are available here: AA Cost of Motoring

Notes

Defined since July 2008 as producing emissions of between 120-140g/km per kilometre driven. Examples include: Hyundai i10 1.1 Deluxe, Fiat Punto Evo 1.2 8V S&S DYNAMIC 5 dr Ha, Opel Meriva 1.4I 100HP S 5 dr Mm, Opel Zafira 1.6 16V VVT LIFE NON A/C 5 dr Mm, Alfa Romeo Giulietta 1750 TBI 235 CLOVERLEAF 5 dr Ha, Lexus IS 2.5 V6 250 S-DESIGN AUTOMATIC 4 dr Sa.

**  a car that does 16,009 kms or (10,000 miles) per year at a fuel economy rate of 37.5 mpg or 7.53 litres per 100 kms will use 1204 litres of fuel per annum or 100.33 litres per month.

** Shopping around to find cheaper deals on your car insurance can really pay off. Multi-product discounts can further lessen the price as well.  You can also find yourself enjoying additional benefits too.  AA Members for example can get fully comprehensive car insurance to drive other cars, even when they’re borrowed. See here for more.