RAC

The cost of motoring

The real cost of motoring has fallen significantly over 20 years. But it doesn't feel like that because, in real terms, fuel prices - the most visible cost - have doubled.

Britain's motorists think the single biggest change in motoring over the last 20 years is the increased cost of motoring.

But is that true in real terms? Has the cost of motoring gone up, remained the same, or even gone down?

To get the definitive answer, a new analysis was undertaken for the 2008 RAC Report on Motoring4.

This reveals that, in real terms, the cost of motoring has fallen significantly across 20 years. So although costs (buying a car, running a car and the cost of fuel) have risen, after inflation has been taken into account, it is still:

  • 18% cheaper to buy and run a car, including fuel costs, in 2008 than 1988
  • 28% cheaper to buy and run a car, excluding fuel costs, in 2008 than 1988.
  • Over the period the Retail Price Index - inflation - increased by 102%

Put another way the total cost of motoring increased to £734 from £395 a month - over the 20 years if the cost of fuel is included. Strip out fuel costs and the figures have increased to £592 from £342 a month.

Total cost of motoring Percentage
Retail price index 102%
Including fuel 83%
Excluding fuel 73%

As the chart shows, whether including or excluding fuel, the increase in the total cost of motoring since 1988 is well behind the overall increase in the cost of living5:

The RAC analysis also looked at buying a car, running a car and the cost of fuel in turn, and found that, in real terms, compared with 1988:

  • It is 24% cheaper to buy a car
  • It is 57% cheaper to run a car
  • But it costs more than twice as much to fill it up

Or, over 20 years:

  • The cost of running a car increased to £94 from £65 a month
  • The real cost of buying a new car increased to £498 from £277 a month
  • The cost of petrol increased to 117.9p6 a litre from 38p
  • The cost of diesel increased to 130.9p7 per litre from 38.4p
  Percentage
Retail price index 102%
Cost of running a car 44%
Cost of buying a new car 78%
Cost of petrol 188%
Cost of diesel 209%

Since 1988 the increases in the costs of buying and running a car are well behind the increase in the cost of living, whereas fuel costs are effectively double the increase in the cost of living.

To complete the picture, the total cost of motoring was compared with the cost of public transport - bus and coach as well as rail travel - over the same period.

This revealed that the cost of public transport has risen by double the increase the cost of motoring.

  Percentage
Retail price index 102%
Total cost of motoring 83%
Cost of rail travel 157%
Cost of bus/coach travel 165%

The analysis for the 20th RAC Report on Motoring shows that although our perception and reality differ over the 20 years, on a day to day basis the spiralling cost of fuel makes us feel that the costs of motoring have increased significantly.

This feeling is compounded by the fact that the Government's annual tax take from Britain's motorist - through fuel duty, VAT, new car tax and the road fund licence - totals some £45bn.

Motoring offences

How has motoring changed?