With concerns rife that the cost of owning and running a car in the UK will leap after Brexit, analysis has suggested it has already increased significantly since the referendum three-and-a-half years ago.
A review of vehicle and fuel prices, along with other driving-related charges, has showed that political uncertainty and a weakened pound have resulted in motoring costs rising faster than inflation since June 2016.
The cost of buying a new car, up 12.4 per cent, parts, maintenance and repairs, up 9.2 per cent, petrol, up 9.2 per cent, and diesel, up 11.2 per cent, have all risen faster than official consumer prices inflation of 8.3 per cent.
And, as Britain prepares to leave the European Union at the end of January 2020, the report warns that further increases in car ownership costs are a ‘very real possibility’.
Forget Brexit: The cost of car ownership, which experts have warned will soar after Britain leaves the EU, has already risen significantly since the referendum in June 2016, a report found
Vantage Leasing conducted the research by analysing various car ownership costs.
It primarily looked at the cost of new motors by reviewing showroom prices and comparing any fluctuation over the last three years.
Figures published by the Office for National Statistics (ONS) as part of the consumer price index show that average new model prices had climbed 12.4 per cent since the UK voted to leave Europe.
And the leasing firm sourced examples of hiked new vehicle charges.
It found that the on-the-road price of the popular Vauxhall Corsa (a 1.4i 75PS Design 5-door), one of the best-selling affordable new cars in the UK, was £12,480 in November 2016.
By June this year, the same model was being listed by Vauxhall for £14,025 – a 12.4 per cent increase, in line with the ONS’s figures.
Vantage Leasing found the price of a new Vauxhall Corsa had been hiked by 12.4% between June 2016 and the same month this year
Automotive industry insiders argue that, faced with increased importing and raw material costs due to the falling value of the pound, manufacturers have raised list prices and reduced customer discounts to compensate.
Other key ownership costs have increased, too.
Figures show that the average car insurance premium is up by 6.2 per cent – or £46 – since the referendum and the cost of replacing a tyre has also jumped by 6.4 per cent since July 2016.
Vantage Leasing also claimed that the cost of spares and accessories has increased by 8.7 per cent in that time, and the maintenance and repair bill are up by 9.2 per cent.
In contrast to steadily climbing new car prices and maintenance, the cost of fuel has fluctuated since the referendum.
The net result is still higher costs for drivers, however.
UK fuel costs have fluctuated since the referendum, influenced heavily by the wavering value of the pound. Petrol and diesel was still more expensive at the end of October than in June ’16
In July 2016, the average price for a litre of premium unleaded petrol was £1.16, according to the Department for Business, Energy and Industrial Strategy’s data.
In October 2019, the average was £1.27 – a 9.2 per cent hike.
Overall, this means that the cost of filling the 55-litre fuel tank of a medium-sized car from empty has risen by £6.05, from £63.80 to £69.85.
Diesel prices have risen even more sharply, increasing from £1.19 to £1.32 over the same period – an 11.1 per cent jump.
Those who run their car on super unleaded have paid the greatest price, with the cost of a litre rising from £1.24 in July 2016 to £1.39 in October 2019 – an 11.6 per cent increase.
For drivers covering 12,000 miles a year in a car that returns 45mpg, the increase in fuel costs means that, at October 2019 prices, they will spend an extra £129 per year on premium unleaded.
A diesel car returning the same fuel economy and covering the same mileage will cost owners £160 more per year than in July 2016, while those running their car on super unleaded will pay a hefty £175 more per year for fuel.
While new car prices have gone up, according to the ONS, the average second-hand motor is cheaper today than it was three and a half years ago
But it’s not all bad news for drivers.
While the price of new cars has gone up, used values have gone the other way, with data suggesting that the average second-hand car cost 4.4 per cent less in October 2019 than in July 2016.
Commenting on the report, James Buttrick, marketing manager at Vantage, said: ‘Since the Brexit referendum was held three-and-a-half years ago, there has been a gradual but very tangible increase in the cost of running a car.
‘With so much uncertainty around the details of the UK’s departure from the EU, the automotive industry has found itself one of the worst affected.
‘It’s hard to see that getting any better for the industry or the motoring consumer as we finally head towards Brexit.’
The SMMT has warned that the impact of a no-deal Brexit could be catastrophic for the UK motor industry and would see motorists charged 10% more for imported new vehicles
The Society of Motor Manufacturers and Traders, the body that represents the UK car industry, has warned that a no-deal Brexit could be catastrophic for the sector and also make vehicle ownership far more expensive for Britons.
Deflecting to World Trade Organisation tariffs as a result of a deal-free Brexit, for example, would mean new vehicles imported to the UK would become 10 per cent more expensive to purchase.
Mike Hawes, SMMT chief executive, said: ‘A ‘no deal’ Brexit would have an immediate and devastating impact on the industry, undermining competitiveness and causing irreversible and severe damage.
‘UK and EU negotiators have a responsibility to work together to agree a deal or risk destroying this vital pillar of our economies.’
While motoring costs have risen at a more rapid rate than inflation since the referendum, household bills have increased even more sharply
How the costs compare
While the cost of running a car has risen since the EU referendum, it hasn’t jumped as steeply as the cost of heat and power for our homes.
Although energy prices have fallen in recent months, the long-term trend is upwards, with ONS figures showing a significant 14.1 per cent rise in the cost of electricity, gas and other fuels since July 2016.
That said, Britons’ average earnings have increase at a more rapid rate than inflation since the Brexit vote.
According to the ONS’s average weekly earnings figures, average total weekly pay has risen 9.9 per cent since June 2016, from £493 to £542.
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