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Escalating prices have been a factor in so many areas of life in the UK recently – and motoring has been one of the most affected.
The recent news of insurance premiums going up by an average of 48% year-on-year is just one sign of how inflation is squeezing UK motorists.
But it’s not the whole story. From used car prices to the cost of repairs, the UK’s economic issues are putting a strain on all aspects of car ownership. So, what’s behind the surge, and how can you keep a lid on your motoring costs?
Why has inflation affected motoring?
There are a few factors at play. Firstly, the rising cost of raw materials and parts due to global supply chain issues is pushing up the price of everything from new cars to replacement parts for repairs. These kinds of issues have affected all manner of consumer products from games consoles to kitchen appliances.
Secondly, garages themselves are facing increased operational costs, including higher energy bills and potentially higher wages to attract skilled mechanics. These costs inevitably get passed on to the consumer.
Insurance costs
The aforementioned rise in insurance premiums is partly due to the increased cost of repairs, as insurers factor potential repair bills into their calculations. Additionally, a rise in accidents and claims puts a strain on insurance companies, leading them to raise premiums to maintain profitability.
The used car market
As new car production ground to a halt during the pandemic, prices of used cars skyrocketed, making the second-hand market potentially attractive to people that could spot a bargain and flip it to counter inflation.
However, used car prices are now starting to fall. That’s great news if you’re looking to get your hands on a pre-owned model in 2024 – but not so much if you have one that you want to sell.
Fuel costs
Fuel prices have been steadily climbing for months, although petrol and diesel are unlikely to hit the record highs seen in 2022. The war in Ukraine has exacerbated the situation, with global oil prices rising sharply. While the government has implemented a fuel duty cut, it’s unlikely to fully offset the ongoing price increases.
How to control motoring costs
- Shop around for insurance: Don’t automatically renew with your current provider. Get quotes from several insurers and use comparison sites to get the best deal.
- Maintain your car properly: Regular servicing helps prevent minor issues from becoming expensive repairs. Consider getting an interim service between the manufacturer’s recommended intervals to catch problems early.
- Fuel efficiency matters: When considering a new or used car, prioritise fuel efficiency. Look for models with a good MPG (miles per gallon) rating. Consider electric or hybrid options if they fit your needs and budget.
- Drive smart: Observe speed limits, avoid harsh acceleration and braking and minimise unnecessary journeys. These practices can all contribute to improved fuel economy – and spending less at the pumps!
- Shop around for repairs: Get quotes from multiple garages before committing to any repairs. Consider independent specialists who may offer competitive rates compared to dealerships.
