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Car owners in the UK are to be hit with rising costs in almost all areas of vehicle ownership this year as prices spiral. From road tax to insurance to servicing the cost of owning and running a car is rocketing leading some to consider other options.
Drivers now have to consider the record price of fuel, low emissions zone charges, higher VED (road tax), insurance premium rises, higher servicing costs, more expensive finance, company car tax rises and even paying to park while at work, reported Autocar.
Here are some of the areas owners are feeling the cost of living crisis the most.
Company car tax: For cars registered from 6 April 2020, BIK rates will rise by 1% from April 2022.
A 40 percent tax payer will pay £107 more a year to run a car.
VED (Road tax): From this month, the standard rate of road tax is rising by £10, while for the first year of a car’s registration, rises will range from £5 for some of the least-polluting cars to £120 for the worst offenders.
Fuel: Government figures reveal that at the end of March, a litre of petrol cost £1.63, compared with £1.25 a year ago – an increase of 30 percent. This means a car with a 55 litre tank costs £21 more to fill than in 2021.
Also the energy price cap on certain standard variable electricity rate deals rises by 54 percent.
An EV with a 60kWh battery that currently costs about £9 to charge will instead cost £14.
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Car insurance: In 2021, the average price paid for comprehensive motor insurance was £434, but as the year drew to a close, this figure rose by £11 to £445.
Used car prices: Used values rose by almost 28 percent on average last year, while some went up by as much as 70 percent.
The Office for National Statistics said that, along with fuel, the rise in used car prices was one of the largest contributors to general inflation.
Interest rates: Inflation in the UK is running at 7 percent. To address this, the Bank of England raised its official interest rate from 0.50% to 0.75% in March, meaning the cost of borrowing to buy a car is up by a quarter.
Servicing: Owing to rising energy prices, labour costs and material values, car servicing and tyres are likely to become around 8-10 percent more expensive during the year.
Fees: Later this year, the DVSA is increasing the cost of driving tests, both theory and practical, and vehicle inspections by 1.5 percent.
Meanwhile, the cost of Individual Vehicle Approval inspection is rising from £450 to £456.80.
Company car parking charges: Many councils are considering imposing workplace parking levies.
Nottingham already does, charging companies and organisations £428 per space.
More than half of that cost is passed on to staff, and the charge is due to rise to £458 from April.
Cambridge and Hounslow are considering imposing higher charges of £1000 per space, while other councils exploring such a levy include Bath, Birmingham and Oxford.
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