The Green Insurer
The cost of motoring accelerates 11%
By Craig Perry, 4th December 2023
Category: Car insurance
- Motorists will spend almost £300 more this year on the cost of running a car, compared to 2022.
- Fuel is still the biggest expense however motorists are expected to save £121 on petrol this year.
- Insurance premiums make up a third of the cost of motoring, following a record price hike in the past year
Soaring insurance premiums are driving up the cost of motoring with UK drivers estimated to spend £2,813 in running costs this year. The analysis1 by The Green Insurer, the UK’s first green car insurance broker, reveals the average annual cost of running a car is up 11% - or £277 – from £2,536 in 2022.
Fuel remains the biggest expense for motorists this year, accounting for 38% of the overall cost of running a car. This is down from 47% in 2022, following a 10% fall in petrol prices over the last year.
Motorists are however unlikely to pocket the £121 saving on fuel this year, as the average insurance premium has risen by almost three times this amount (£338) in the same period. As a result, insurance now makes up a third of all running costs, compared to just 23% last year.
Furthermore, new analysis2 from Consumer Intelligence for The Green Insurer reveals that the average car insurance premium has increased by on average 66.5% in the year to October 31st. They are now 79.1% higher than five years ago.
Car repairs and servicing make up the third largest cost to motorists (14%), followed by road tax (7%).
Table of the estimated costs of running a car in 2023, compared with 2022
| Costs associated with running a car | Estimated cost in 2022 | Estimated cost in 2023 | YOY change (£) | YOY change (%) |
|---|---|---|---|---|
| Unleaded petrol3 | £1,180.18 | £1,059.13 | -£121.05 | -10.26% |
| Insurance4 | £586.00 | £924.00 | £338.00 | 57.68% |
| Accessories and fittings5 | £15.60 | £16.82 | £1.22 | 7.80% |
| Spare parts5 | £109.20 | £117.72 | £8.52 | 7.80% |
| Repairs, servicing and other motor oils5 | £374.40 | £403.60 | £29.20 | 7.80% |
| Motoring organisation subscription (e.g. AA and RAC)5 | £15.60 | £16.82 | £1.22 | 7.80% |
| Garage rent and other costs (e.g. car washing)5 | £36.40 | £39.24 | £2.84 | 7.80% |
| Parking fees, tolls, and permits5 | £31.20 | £33.63 | £2.43 | 7.80% |
| Anti-freeze, battery water, cleaning materials5 | £5.20 | £5.61 | £0.41 | 7.80% |
| Motoring fines5 | £5.20 | £5.61 | £0.41 | 7.80% |
| Motor vehicle road taxation payments less refunds5 | £176.80 | £190.59 | £13.79 | 7.80% |
| Total costs | £2,535.78 | £2,812.76 | £276.98 | 10.92% |
Further research by The Green Insurer5 reveals 15% of motorists are currently considering giving up driving over the next 12 months as a direct result of the rising costs associated with owning and operating a car. Rising car insurance premiums are a real concern for over a half (51%) of all car owners, with motorists describing themselves as “very worried” (11%) or “quite worried” (40%) that the escalating prices of car insurance will ultimately force them to stop driving and give up their car.
Similarly, motorists are being forced to wait months and even years to start driving their own car when they pass their driving tests, partly because of high insurance costs. While 14% of motorists need to wait three months to start driving their own car, a further 16% report that they needed to wait between one and five years.
- [1] Based on The Green Insurer’s analysis of various sources of data: rac.co.uk; petrolcalculator.co.uk; fuelly.com; gov.uk; Consumer Intelligence; confused.com
- [2] Consumer Intelligence Car Insurance Price Index November 2023
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[3] Fuel costs estimated on average economy of a Ford Fiesta (as below), with average unleaded prices by year sourced from RAC Fuel Watch on November 23, 2023
A Ford Fiesta does on average 42 MPG (source: fuelly.com).
Average UK unleaded prices by year (source: rac.co.uk):
2022 = 165.06 pence per litre / 751.02 pence per gallon
2023 YTD = 148.13 pence per litre / 673.99 pence per gallon
Average miles driven in a year = 6,600 (Source: National Travel Survey 2022)
Number of gallons to drive 6,600 miles = 157.14
Cost of fuelling a car in 2022 = £1,180.18 (157.14 * £7.51)
Cost of fuelling a car in 2023 = £1,059.13 (157.14 * £6.74) - [4] Confused.com Car Insurance Price Index
- [5] ONS, Family Spending Report 2022. Corresponding figures for 2023 are based on a personal inflation rate of 7.8%, calculated using the ONS inflation calculator
- [6] Independent consumer research conducted by Viewsbank among a nationally representative sample of 1,135 adults aged 18-plus including 888 car owners between November 17th and 20th 2023.