Rising running costs raise TCO fears for UK consumers

September 30, 2016

UK drivers have named rising car insurance and maintenance costs as two of their biggest concerns in research carried out by the RAC. The RAC Report on Motoring 2016 reveals almost half (46%) of the 1,714 motorists surveyed said their insurance costs have increased since last year compared with 34% who said the same in 2015. Average premiums rose by 14% in the 12 months to March 2016, from £590 to £671 per year. In addition, 41% of motorists said they had experienced increased maintenance costs, down three percentage points on 2015. When asked to identify their top motoring concern, the cost of insurance came out third in the ranking, behind the condition of local roads and drivers using handheld phones. Fraudulent insurance claims, a rise in insurance premium taxes and the complexity of repairing modern vehicle systems are blamed for perceived cost increases. RAC Insurance director Mark Godfrey said: “Repair bills are higher due to the ever-increasing complexity of vehicles meaning that a dent to a bumper is now often far more expensive as it incorporates parking sensors.” Interviews by Autovista Intelligence for The Autonomous Car Report revealed that if a windscreen needs to be replaced, the workshop often needs to recalibrate the distance sensors or cameras used in adaptive cruise control, adding up to 25% to the cost of windscreen repair. Consumer concerns about rising costs provide an opportunity for manufacturers to launch new offers or highlight current products in their marketing communications and advertising campaigns that are relevant. These include free insurance products linked to purchases, or the sale of fixed cost maintenance plans that charge a monthly fee to cover all future servicing costs.

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March 31, 2017

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