THE COST OF MOTORING - 2006
How much does it cost to run a car?
Facts on the cost of running a car are an essential resource. They are:
; important to millions of drivers’ individual decisions on what type of car
; important to public discussion when the Chancellor sets motoring tax rates
; key to planning and forecasting transport needs and analysing the various
social and environmental impacts of vehicle use.
These motoring cost tables are produced by the AA Motoring Trust and have become a standard reference. When they were first published in 1950, the Road Fund Licence (car tax) was ?10 and a litre of petrol was 3.3p. However, care is needed with comparisons:
; the modern car is much more economical and a lot safer
; it produces only one or two percent of the toxic emissions of earlier cars
; it is quieter, easier to drive, more durable and much more reliable and
; it carries features that in 1950 would have been literally incredible.
The current figures give a guide as to how much it is likely to cost the average private user to run a petrol or diesel powered car, based on buying a car new and replacing it after four years.
Each year the AA Trust takes 60 top-selling models, representative of the UK market, and analyses their costs over this period. Individual circumstances will vary. For instance, fuel consumption will depend on the particular vehicle type and local traffic conditions, and the expense of repairs needed can be very unpredictable. However, the guide aims to show a representative cost that reflects all the important items to enable motorists to see how it all adds up.
The standing charges are those incurred just by keeping the vehicle ready for use on the road. They include road tax (annual vehicle excise duty - VED), insurance, cost of capital used, loss of value (depreciation), and annual roadside breakdown cover. Depreciation is usually the biggest single cost factor, though it is easy to lose sight of it as a day-to-day expense.
； The AA Motoring Trust www.AAtrust.com page 1 of 8
The standing charge will be an annual sum that needs to be provided for, even if the car is not used. This charge can be shown as a ‘cost per mile’ figure by dividing it by the annual mileage covered. The tables (attached below) show these for between 5,000 and 30,000 miles per year with the result adjusted to allow for the different depreciation brought about by the particular annual mileage.
Running costs are those that depend directly on using the vehicle – primarily fuel,
but also include parking and tolls, tyres, servicing and repair costs. On average, every mile run adds this cost to the annual bill, and every mile saved reduces it by the same amount.
Cars are put into groups depending on the new car price. This is a better guide to the cost of running a car than, for instance, its engine size. Calculations are made by taking the new car list price when first registered, including the main options (eg, automatic gearbox, air conditioning etc) supplied with the car. If in doubt, used car price-guides will give original list prices.
As the cars analysed for the report were the popular sellers, most do not yet feature in the very low CO emitting categories (CO VED labelling bands A or B). 22
Vehicles in these bands will be included as they increase their market share.
This year the AA Trust has produced running costs for an average of six of the best-selling SUV (or 4x4) vehicles (for petrol and diesel engines). Their costs are included in this report, but show little variation from the typical costs within the ?20k to ?30k band.
How much employers pay for mileage is a matter for negotiation between them and the employees, as circumstances will vary. HM Revenue and Customs operates the Approved Mileage Allowance Payment (AMAP) system – details from your local
tax office or from the HM Revenue and Customs web site:
www.hmrc.gov.uk/mileage/index.htm (using your own vehicle for work)
www.hmrc.gov.uk/cars/fuel_company_cars.htm (company cars)
The figures given in the attached tables are VAT inclusive.
The AA Website
The Motoring Costs tables are also on the AA website at www.theaa.com
； The AA Motoring Trust www.AAtrust.com page 2 of 8
Notes to Motoring Costs 2006 tables:
A Road Tax. Cars registered on or after 1 March 2001 have a rate of vehicle
excise duty (VED) set according to their fuel type and their emissions of
carbon dioxide (CO) in the legislated Type Approval tests. Older cars will 2
have one of two rates: cars with an engine capacity of less than 1549cc, and a
higher rate for engines above this size. In the tables, the average for each
price group is used to produce the VED rate shown.
B Insurance. This is the UK average cost for a good, comprehensive policy,
with a 60 per cent no claims discount.
C Cost of capital. This sum represents the loss of income due to the owner
having money tied up in a vehicle, which otherwise could be earning interest
in a deposit account. This is currently calculated at 4.5 per cent of the
average value for the cars chosen for each cost group. Any charges for a loan
or hire-purchase finance will be extra to this.
D Depreciation. Cars will lose value at different rates, depending on their
make, age, mileage and condition etc. The tables assume that depreciation
costs are averaged over four years from purchase, and include typical
adjustments for the different annual mileages in that period. Older cars will,
in general, depreciate at a slower rate than they did when they were new.
E Breakdown cover allows for AA ‘Option 100’ single membership at current
F Fuel cost is based on the average UK price at the time of publication, but can
be adjusted, as required, using the factors given. The fuel consumption
figures taken are typical for each of the car groups listed.
G Tyre prices may vary throughout the country and according to brand, but
these are average costs based on a tyre life of 20,000 miles.
H Labour costs cover normal servicing and parts replacement at a dealer,
taking average UK labour rates for each of the car cost groups.
I Replacement parts included cover those likely to be needed under normal
driving conditions, such as brake materials, oils, filters, bulbs, wipers and
J Running costs include an allowance for parking and road tolls, based on a
national average for an urban driver. However, the sums actually paid will
vary substantially according to individual patterns of use.
For more information on running costs, including tailored calculations
for specific new car models visit: www.theaa.com
； The AA Motoring Trust www.AAtrust.com page 3 of 8
Motoring Costs 2006
Purchase price of the car when new:
?10,000 ?13,000 ?20,000
Up to to to to Over See
Standing charges per
year, ? ?10,000 ?13,000 ?20,000 ?30,000 ?30,000 note:
A Road Tax 100 125 150 190 190 B Insurance 362 457 541 717 880 C Cost of capital 270 375 467 766 1183 D Depreciation