Car costs to rise after VAT hike

There could be fewer drivers on British roads following the return of VAT to 17.5% on January 1, with the rise affecting the cost of new vehicles, replacement parts, fuel, tyres, service labour costs and breakdown cover, research reveals.

The cost of the UK's most popular vehicle, the Ford Focus, could increase by £306 in the new year from its current price of £14,118.

Buyers will have to cough up £182 more if they want to buy a new Ford Ka, Britain's favourite city car, while the BMW X5 - the most popular SUV - will cost an additional £1,300 from January 1, according to Auto Trader.

Rises in fuel prices could also put pressure on motorists who cover many miles and they have been warned to check the miles per gallon that their current vehicle offers. 

Although the Ford Ka gives good economy, motorists who drive an average 12,000 miles a year will spend about £80 a month fuelling their vehicle. Additionally, increasing maintenance costs could result in a 2.5% rise in the amount owners pay to run their cars.

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