Revealed: How much hard-pressed motorists spend on running a car each year
Is your car worth it?
Hard-pressed motorists are now paying close to €11,000 a year to run a car due to exorbitant increases in car insurance, according to the AA.
The average family is now forking out an average of €10,849.42 to run a car – an increase of €255.82 over last year, shocking new figures reveal.
And despite a substantial drop in fuel prices, any gains for motorists at the pumps have been wiped out by an average increase of almost 40pc in insurance premiums for the average motorist over the past year, according to the AA’s annual survey of motoring costs.
“In a better year we could be talking about the fall in fuel prices. Drivers won’t notice though because of the enormous surge in insurance costs,” said AA’s Director of Consumer Affairs Conor Faulknan.
He said the onus is now on the Government to reign in the motor insurance industry.
“The insurance crisis is particularly frustrating because much of it is unnecessary. While it is true that motor insurance was losing money a few years ago and the price had to rise a bit, there are things that Government and the industry could do right now that would pull prices downwards,” he said.
The issue is to be addressed by the Dail’s Joint Committee on Finance, Public Expenditure and Reform, which will be holding public hearings on the matter which committee chairman John McGuinness last week described as requiring “urgent attention in view of the dramatic rise in motor insurance premiums.”
“The Committee will meet with all of the relevant stakeholders to determine the factors behind the dramatic increases seen in the premiums of policy holders. Our work will examine all aspects of the motor insurance industry including how insurance claims are assessed and processed and the impact of the cost associated with these claims, how data is managed between relevant bodies and the effectiveness of current regulation,” he said.
“Policy premiums rising at unsustainable rates are a threat to the effective functioning of the wider economy. Indeed the inflation figures released in May of this year from the Central Statistics Office, show the cost of motor car insurance increased by 35.5pc year on year, and this has a very real impact on people around the country.”
The Dail committee hearings will get underway on Wednesday when Minister of State Eoghan Murphy will make a presentation to the committee. Thursday will see representatives of AA Ireland, Underground Ireland, Age Action Ireland, Consumers' Association of Ireland, ISME, SFA and IBEC meet with the Committee.
Meanwhile, fuel prices, at least, have dropped significantly over the past year, according to the AA.
The average price of €1.27 a litre in August was around 11pc lower than the same time last year, which works out to a saving of around €196.80 a year for a typical motorist driving a Band B car.
However, tax remains the biggest obstacle for motorists, who are paying an average of €1,554 for fuel a year, with 60pc of the cost of fuel going into Government coffers.