About the index:

The RAC Direct Insurance Cost of Motoring Index is an in-depth piece of research which tracks all costs associated with owning and running 17 different models of car.

Key findings from the 2007 index:

• The average family car now costs £5,627 a year to keep on the road, an increase of £162.70 year-on-year
• Average daily running costs for an average family car have fallen close to the levels of 2005, seeing the total cost of motoring rise by only 3% year-on-year, compared with an 11% increase the previous year
• Car maintenance costs are down by 8% to £273 a year compared with £298 in 2006
• The price of fuel has fluctuated throughout the last year with petrol prices today 0.24% lower and diesel prices 1.22% lower per litre than at the pump a year ago. This combined with today’s more fuel-efficient cars has led to a decrease of nearly 10% in the real cost of fuel used per year
• Depreciation is the largest cost factor, as it has been in previous indexes, with the average car now losing £2,357 a year, nearly a 6% increase on 2006. The average motorist is now losing £45.33 a week on the value of their car and the residual value of cars in the index after three years has dropped from 47% to 42%
• The cost of borrowing is at a six year high, experiencing a 17% increase since this time last year (£169 more than in 2006)
• The average cost of tax decreased by a minimal amount, but owners of 4x4 vehicles have been hit the hardest with a massive increase of nearly 60% in car tax. However, in line with the Government’s support for greener motoring, environmentally aware car owners enjoyed a tax decrease of 50%
• The average annual cost of insurance premiums rose only slightly by 1%, or the equivalent of just over £4 year-on-year with the majority of the increases due to a number of vehicles in the index moving into higher insurance groups

According to the Index, the full costs for running a car are:

Variable	Q2 2007 £	Q2 2006 £
Depreciation	2,357	2,233
Fuel	1,129	1,246
Cost of Finance	1,160	991
Insurance	446	442
Maintenance	272	298
Tax	129	130
RAC membership	133	126
Total cost (per year)	5,627	5,466
Total cost (per week)	108.20	105.11

For further information contact:

RAC Press office
Adam Cracknell

Telephone: 01603 684916
adam.cracknell@aviva.co.uk

Updated November 2007

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