A car was once a luxury that only the rich could afford to own and run, but since Henry Ford started mass producing his Model T in the 1940s, cars have become readily available. But if the cost of running a car continue to rise however, it might become more of a luxury commodity again. Relatively speaking, the cost of buying a car is decreasing, running it however, is becoming more expensive. In the last two years, the annual cost of maintaining a car has increased by 11% according to a recent survey by Sainsburys Finance.

The survey found that annual car costs are, on average, 2,338. This rise comes from increased servicing costs, higher taxes and greater insurance premiums. There is no real reason as to why, since 2007, servicing costs have increased by 3.76%. Are we getting a better service than in 2007? The answer, most likely, is no.

Car tax is another factor that has increased, although this now varies much more depending on the car you drive. On average, car tax is now almost ?170, an increase of 7.5% on 2007 levels. But this figure hides the variation caused by the green tax i.e. taxing the dirtiest and most polluting cars more than the cleaner, efficient ones.

The is to encourage drivers to buy more environmentally friendly cars. So drivers that have economical cars with low CO2 emissions are now paying less tax. Therefore, it pays to downsize to a more fuel efficient car that gives off fewer harmful CO2 emissions. In addition to this, because these cars are more economical, you will pay less for fuel, (which isnt included in the survey). Fuel is another element of car driving that has increased since 2007, therefore getting more miles to the gallon is doubly as important now.

The biggest stir however, has been caused by the huge increase in insurance premiums. Car insurance now averages at 551 per car, an increase of 23% on 2007 levels making it by far the single biggest cost involved with running a car. This makes getting the right insurance at the right price is now even more of important.

With fuel and taxes likely to increase further, you should start saving on your car insurance now.

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Article Submitted By: JasmineGrant
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