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Drivers less concerned about cost of fuel

30 September, 2016

Drivers are more concerned about the cost of car insurance than they are about expenditure on fuel, according to the RAC Report on Motoring 2016.

Almost half (46%) of the 1,714 motorists surveyed for the report said their insurance costs have increased since last year compared with 34% who said the same in 2015.

And insurance price rises were the greatest financial worry for motorists’ with 8% listing insurance bills as their top motoring concern in 2016, compared with just 5% last year.

In contrast only 7% of drivers listed fuel prices as their top concern in this year’s report, down from 10% 12 months ago, and considerably down from 2014 when it was the top concern for 21%.

Expenditure on fuel – generally the biggest contributor to annual motoring costs – was said to have gone up by only three in 10 (30%). The report suggested many people whose expenditure had gone up were probably driving more because fuel prices were lower than last year. According to RAC Fuel Watch data there were falls in petrol and diesel prices in 2015 and in the early months of 2016.

RAC insurance director Mark Godfrey said: “The cost of insurance has never ranked as highly among motorists’ concerns in previous years’ research for the Report on Motoring as it has this year, and neither has it featured as prominently in motorists’ assessment of increased motoring costs.

“Sadly, a variety of factors are causing premiums to go up, from a higher volume of claims due to more miles being driven to more expensive repair costs. Repair bills are higher due to the ever-increasing complexity of vehicles meaning, for example, that a dent to a bumper, which a few years ago would have been simple and cheap to repair or replace, is now often far more expensive as the bumper incorporates parking sensors.

“The issue of spurious whiplash personal injury claims unfortunately continues to add cost to premiums. The Government announced proposals to tackle this issue in last year’s Autumn Statement alongside the further increase in Insurance Premium Tax. We do not believe that these proposals will necessarily get to the heart of the issue and nearly ten months later we are no further forward as the promised industry consultation to address the issue has not yet begun. We need the Government to push forward on consultation to get to a concrete set of changes that will deliver a reduction in such personal injury claims.

“The Government’s decision to increase Insurance Premium Tax in both 2015 and 2016 at a time when premiums were on the rise is also noticeably impacting household budgets.

“Insurance is, quite rightly, mandatory for anyone getting behind the wheel of a vehicle so increasing IPT is really another tax, like fuel duty, and is an unwelcome addition to the already considerable contribution made by motorists to the Treasury.

Keywords: prices, fuel, RAC, insurance




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