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Insurance and vehicle RV slump wipe running cost savings

Higher insurance costs and resale values undermined by a depressed used-car market have wiped out running cost savings from a five-pence-a-litre drop in fuel prices over the previous year and competitively-priced oil, tyre, servicing and other maintenance costs.

The AA Motoring Costs 2001, available free of charge on the AA's website at the end of April, show that, for the first time in at least five years, motorists doing around 5,000 miles a year will see their motoring costs dip while higher mileage drivers are worse off.

Even so, owners of 1,101-1,549cc cars driving up to 5,000 miles a year pay an average of 59.16 pence per mile against 36.93 pence for those driving 10,000 to 15,000 miles annually. Monthly motoring costs average out at £246 and £461 respectively.

"Personal injury claims, increased repair and courtesy car costs, and an estimated 1.5m uninsured drivers are pumping up insurance premiums while falling new car prices and a depressed used-car market have lowered residual values by 5-10%," said Dave May, manager of AA Technical Advice.

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