Falling fuel prices obliterated by car insurance hikes, says AA
Savings made on petrol have been absorbed by accelerating motor insurance rates
Motoring costs: the AA calculates that the 38.6 per cent increase recorded in inflation figures over the past year by the Central Statistics Office cancelled out savings from falling fuel costs. Photograph: Barry Batchelor/PA
Motor insurance rises have wiped out any savings motorists have made on fuel prices from the falling cost of oil, according to AA Ireland.
The motoring services business says the average yearly cost of running a family car has risen in 2016 by 2.4 per cent, or €255.82, to €10,849.42.
This is the second consecutive year that motor insurance premiums have risen sharply. The AA calculates that the 38.6 per cent increase recorded in inflation figures over the past year by the Central Statistics Office cancelled out savings from falling fuel costs.
AA Ireland’s director of consumer affairs, Conor Faughnan, noted that drivers won’t notice the benefit of lower fuel prices because of the “enormous surge” in insurance.
“The insurance crisis is particularly frustrating because much of it is unnecessary,” he said. “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.”
AA’s figures show that, as a result, the typical motorist is saving €196.80 a year, though they are still paying €1,554 for fuel, with tax accounting for more than 60 per cent of this.
AA Ireland calculates the annual cost of motoring using a figure that comprises fuel, insurance, servicing and other expenses. These include depreciation and interest as well as the replacement of parts and tyres over a car’s life.
It assumes that a motorist buys a new car, keeps it for eight years and drives 16,000km annually.