Mr Money: It's the road to ruin as motor costs soar to £7k per year - The Sun Mr Money: It's the road to ruin as motor costs soar to £7k per year - The Sun

Sunday, June 17, 2012

Mr Money: It's the road to ruin as motor costs soar to £7k per year - The Sun

Mr Money: It's the road to ruin as motor costs soar to £7k per year - The Sun

Soaring fuel, insurance and maintenance charges play a key part in the jump that will see families pay out a fifth more to run their car than they did in 2010.

And the £7,004 bill is a wallet-busting £1,871 — 36 per cent more than it was five years ago.

It means drivers are paying 58.4p a mile to keep a car on the road.

Fuel is one of the main culprits — prices have been driven ever upwards by a combination of rising oil prices and SEVEN increases in fuel duty by the Government since 2008 as well as two VAT increases.

Over the past two years petrol prices are up 16.9 per cent, diesel is up 20.3 per cent.

But the cost also takes account of the fall in car values, and the costs of finance, breakdown cover and tax.

The only thing to decline in cost is finance — as interest rates have tumbled. The greatest single cost for motorists in 2012 is fuel, with the annual bill now £1,472 compared to £1,129 in 2007.

It is the price of car maintenance which has risen the most over the last five years, jumping 52 per cent to £488 per year.

On top of this, motorists also spend 50 per cent more on insurance than in 2007, meaning they face an annual bill of £671.

Research for Mr Money by the RAC clearly tell us that UK motorists are feeling the pinch.

David Bizley, RAC technical director, said: “Over the last five years not only have we seen the cost of fuel soar to unprecedented levels, but also staggering rises in the cost of insurance and car maintenance.

“These rises are forcing many motorists to make tough choices about what trips they take and how they can afford to take them.

“Things are only likely to get tougher with another 3p a litre increase set to land on motorists’ laps from August as the Government hikes fuel duty yet again.

“Endless rises in duty aren’t the answer and this one in particular needs to be scrapped.”

The Sun revealed on Friday how petrol prices have risen more in the UK since 2007 than anywhere else in Europe.

Mr Money also asked the RAC to look at what makes of cars are the dearest and cheapest to run.

A three-litre Land Rover Discovery is £12,436 a year while a Toyota Yaris 1.0l is £4,715.

Why the difference between the cost of running different cars?

Bigger cars are generally more expensive for five key reasons:

- Their FUEL CONSUMPTION is generally higher, which means drivers can’t do as many miles to the gallon as they would in smaller cars. This increases the annual fuel bill markedly, especially in the biggest, heaviest cars with very large engines.

- ROAD TAX costs increase substantially for bigger, more polluting cars. Under the current system, road tax is based on CO2 emissions of cars — meaning larger cars that emit more face a much higher bill.

- DEPRECIATION also rises rapidly for big cars. This is mainly because their original cost is much higher than that of smaller vehicles, meaning their second-hand price has further to fall.

- INSURANCE costs are higher, as the value of these cars is higher than for smaller cars. And car insurance costs have risen markedly. One of the chief causes of this has been additional costs following a claim — third party claims for whiplash have exploded, in part because of the rise of the no-win, no-fee claims lawyer culture.

- MAINTENANCE costs are also higher for bigger cars — they tend to be more complex which means a bigger bill at annual service time.

Here are my tips on how to save fuel – and money – while driving:

1. Drive smoothly and plan ahead – avoid sharp braking and accelerating. This can save up to 15 per cent on fuel costs.

2. Take your time and stick to the posted speed limits – slowing down by 10mph will save you 40p on fuel for every ten miles you drive – and that soon adds up to big money

3. Think of revs as Pound signs: the higher the revs, the higher the fuel bill.

4. Check tyre pressures regularly – under-inflated tyres can increase fuel consumption by two per cent.

5. Shop around for fuel – use price comparison websites such as to find the cheapest fuel near to where you live.

Business groups warn Welsh government on 'living wage' - BBC News

Business leaders have warned the Welsh government not to push for private sector pay rises as ministers investigate public sector wage levels.

Labour has a manifesto commitment to find ways of making sure all Welsh workers are paid a "living wage".

Business groups say it may stop firms taking on staff or even mean layoffs.

The Welsh government says it is beginning to examine how devolved public sector employers can be encouraged to pay a living wage.

A policy group of interested parties is expected to meet over the summer.

Academics at Loughborough University have estimated a living wage is at least £7.20 an hour. The current statutory minimum wage is £6.08 an hour for workers aged 21 and over.

Start Quote

I'm afraid it just isn't realistic in the environment we live in”

End Quote Robert Lloyd Griffiths Institute of Directors

Welsh NHS workers and Welsh government civil servants are already paid at least the living wage.

A number of big private sector employers, including Barclays Bank and accountants KPMG, are also signed up to paying it.

But business organisations warned Welsh ministers not to try to force them to raise wages, for example by inserting living wage clauses in government contracts.

Robert Lloyd Griffiths of the Institute of Directors said he was concerned the living wage would effectively become the new minimum wage.

"Businesses would like to take on more staff and lots of companies that I talk to would love to be in a position to be able to take on more employees," he said.

'Very difficult'

"It's very difficult out there and anything that now will hinder them from doing that, which they'd like to do, is going to cause problems.

"I'm afraid it just isn't realistic in the environment we live in."

Anna Milewski, of the Federation of Small Businesses, said: "We have to look at it from the employers' perspective, we've surveyed them.

"They say that an increase can, at best, deter them from taking on staff at worst actually result in them laying off staff, which would not be a positive outcome, of course."

Start Quote

If we're the trailblazers we hope the private sector won't be so frightened of it”

End Quote Julie Morgan Labour AM

The Welsh government said: "Unlike the minimum wage, the living wage is not statutory.

"However, any employer in the UK is free to sign up to the Living Wage Foundation's campaign. The Welsh government is starting to look at how devolved public sector organisations have been engaging with the idea and what it would take to encourage those organisations to become living wage employers.

"This is a key reason the Minister for Local Government and Communities [Carl Sargeant] has decided to set up a policy group, so that consideration of the benefits, in much the same way as they were in London, can be given collaboratively. That group has yet to be brought together, but it is anticipated that this will happen over the summer."

Labour AM Julie Morgan said: "If we're the trailblazers we hope the private sector won't be so frightened of it and will actually see the benefit of a workforce which when they're happy and healthy work harder, stay longer, are more and actually do better work. So it's a win win, really."

Young campaigners, working with Save the Children, recently petitioned the assembly for a living wage above the minimum wage.

Iram Shahzad, a 13-year-old pupil at Fitzalan High School in Cardiff, told BBC Wales Sunday Politics that people in her community were working long hours but not earning enough money to cover their everyday essentials.

"It's not fair that they don't get to live a happy life," she said.

James Pritchard, head of Save the Children in Wales, said a living wage would be a "direct way of starting to tackle child poverty".

Sunday Politics is on BBC One Wales at 12:00 BST on 17 June.

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