Getting behind the wheel of a car is one of the most exciting occasions in a person’s life, and one of the most expensive – particularly in the UK. Recent research showed the exact disparity of motor vehicle usage here; the average price of buying and running a new VW GolfTrendline is £18,901 a year, while in Russia the equivalent would cost £11,605. In India it would cost just £8,768 for running exactly the same car.
Compared to other nations around the world the UK is paying out the pounds to take to the road for the same journeys. So are we just unlucky to live in this sceptred isle? Perhaps, and perhaps one might take it further by stating that drivers are just especially unlucky to be living here in this time. Overall, the costs of driving have never been higher.
One obvious example is insurance – for young people the costs of cover are spiralling out of control. Car insurance rose by 13% last year according to research from Consumer Intelligence, to an average of £788 per year, but for a driver under the age of 25 the average is £1,831. Even the black box telematics system – which monitors driving habits in real time and alters premiums to reflect the safety of the driver – only lessen the price slightly, with costs rising 9.4% in the past year.
Insurance is rising for a large number of reasons. Personal injury claims are rocketing for alleged injuries, and these claims are actively encouraged by firms representing people who have been in accidents. At the time of writing, ‘whiplash claims’ produce more than half a million results on Google, including numerous ‘Claim Calculators’ that take as little as 30 seconds to complete and fire out a figure that you might expect. Gallingly, the government imposed curbs on the level of these claims that could be made which were predicted to save the insurance industry £520 million, but this has not translated to the cheaper insurance costs that were expected, of £50 per driver per year.
Even as our cars are becoming more technologically sound and advanced, with the intention of making them safer and reducing the risk of crashing, that new technology is costly. According to Forbes, autonomous cars will be a regular sight by 2020, while active window displays and even in-car health monitoring will be common. These features will come at a price, one which will possibly exceed the cost of inflation – and that cost will translate to higher repair bills. The possible plus side is that insurance could also significantly drop for some drivers who do not drive as far as others, as premiums could be based on miles driven (monitored through geotracking of driver patterns). The assumption is that those who drive less are less risky.
That’s if they get behind the wheel in the first place. The average cost of an hour-long driving lesson is £24, and the DSA predicts that the number of lessons needed is likely to be around 47, equating to a total of £1,250 when the practical and theory tests are taken into account. Since driving tests were first introduced in 1935 the cost of taking a test has increased from seven shillings and sixpence – £22 in today’s money – to £62 or £75 on weekends.
Several other changes to the licensing procedure have also come at a cost to those who are learning to drive. That’s not necessarily a bad thing, as few would argue that imposing a mandatory need for the written theory test (which came into force in 1996) and for cars to possess seat belts on the passenger side (1999) are negative things.
Unless you’re a driver of very advanced years you probably won’t remember a time when there was no fuel duty imposed on petrol, or four star as it was then. The tax was dropped in 1920 for almost a decade, only reappearing in 1929 at a rate of just over 21%. Compare that to 2016, when then-chancellor George Osborne froze fuel duty for diesel and petrol at 57.95p per litre in the last budget. With a litre of fuel costing around 110p, that represents a 53% tax – or a percentage increase of 32% – from 1929.
But it could be worse, as fuel duty rose as high as 83% in the early 90s. And consider this – in 1896, when motoring was still in its embryonic stages, a gallon of petrol cost nine pence. In 2016 the price for a gallon is somewhere around the equivalent of 450p, which is a 50-fold increase.
However, nine pence in 1896 would now be worth £8.37 based on inflation, a 93-fold increase, so one might actually think we’re getting a good deal on our fuel. Even if not, there are so many reasons for these increases such as housing bubbles, Middle East wars, food fluctuations, changing populations and natural inflation, that it’s largely futile getting angry over the rising costs.
There are two other regular costs that we assume as drivers, and both are can be reduced if we buy a new car; MOT tests and road tax. If you’ve ever wondered why MOT tests sometimes cost seemingly arbitrary prices, it’s because the Government sets a maximum cost and garages create a price based on that. The maximum is currently £54.85 for cars, although some garages charge a lot less (be wary of this). For the first three years no MOT test is needed, and after that, the newer the car, the less likely you’ll need any repairs – in a perfect world.
Road tax varies from nothing for a new eco-friendly car to an eye-watering £515 a year for cars that have a CO2 figure over 225g/km. That’s one reason to move towards a more environmentally sound vehicle, although these are not cheap. Even fun and utterly impractical ‘cars’ such as the Twizy weigh in at almost £7,000. There’s hope that the Tesla Model 3, to be released next year, will jolt the market by offering a high performance electric car with its revolutionary lithium-ion batteries at a cost of around £24,000 – but that’s basic specification.
So how will the future cost of driving develop? If autonomous cars are to become widely seen on the roads, how will this affect insurance costs – in fact, will we even have to pay them? Could it be argued that a car over which we are not directly responsible should not be our responsibility for insurance purposes? As of 2016 self-driving cars are hampered by so-called ‘patchwork regulation’ for their safety and use, but a big step was taken when the USA recently released new outlines in how this will be resolved that was enthusiastically received by several manufacturers.
In the digital age, brands are changing the way we drive, in quality and quantity. Toyota has created a new app that rewards drivers who do not check their mobile phones. And as an adjunct to the discussion on driverless cars, Lyft president John Zimmer recently declared that he believed car ownership would ‘all but end’ by 2025, as part of a fleet of cars owned by a few select rideshare companies. Such a vision seems implausible in a world where we all drive differently, in different cars, for different reasons, without relying on a remote digital service on your smartphone. Ultimately, the cost of driving is what you make it – and will continue to be so.