Running a car
Is our love affair with the car finally coming to an end? With petrol hitting an all-time high of 117p per litre in June 2008, the average British motorist is certainly thinking twice before making non-essential car journeys. At this price, the cost per mile for a small, economical vehicle is 13p (or £5.32 per gallon) based on 40 miles per gallon. This would make a 500-mile trip £65, without taking into account the other running costs associated with car ownership.
The good news for low-emission petrol and diesel models is that there is no Road Tax to pay for vehicles emitting up to 100 grams of CO² emissions per kilometre driven. But vehicles with high emissions (over 225 grams of CO²) face a punishing £400 annual bill [source: Directgov] Last but by no means least is the question of depreciation. This hits brand new cars the most – they drop an average of 40% in the first year – and unless you own a classic car you can expect its value to continue to drop even though it won’t be at the same dramatic rate.
Rationalise your car usage
The real issue is whether there are any alternatives to traditional car ownership. While public transport and cycling may be practical for single, city-dwellers, it isn’t a realistic option for families or people living in rural or semi-rural areas. However, many households own two or more cars.
If you are a multi-car household, you could consider replacing the secondary car with an alternative mode of transport. After you have calculated how much it costs to run your vehicles, work out how many journeys you make in each one. If your use of the second car is restricted to the weekly supermarket shop and the school run, it may be that you could forego the expense of running this extra vehicle. For example, many people now choose to shop online for their groceries, a stress-free experience that would also free up your busy weekend schedule.
The school run is more problematic, especially if the journey is more than a few miles long. One possible solution could be to part-own a pool car, whereby you share a car with one or more neighbours and share the expense of running it. Naturally, this would probably require some clever timetabling of the school runs as well as a little negotiation.
Please note that Privilege cannot insure co-bought cars in all instances. Privilege can provide car insurance where the purchaser is a spouse or partner and the car should only be registered in one person’s name. In these cases, the co-owner would still be eligible to build up their own no-claims discount as a named-driver on the policy, which could then be applied on any future Privilege car insurance policy taken out in their own name.
Low-cost alternative to car ownership
If you do opt for a no-car existence, you could consider a car club scheme, such as Streetcar. It’s an increasingly attractive idea that has taken off in Europe and is growing in popularity here in the UK. The schemes vary but generally involve a monthly or annual fee to join, as well as an hourly or daily rate to rent the vehicles themselves. In addition you pay a mileage fee and cover the cost of any fuel you use.
Whatever steps you take, rationalising how you use your car and opting for a low-polluting model will help not only your personal finances but the environment as well.
However you prefer to drive, Privilege can help you find the car insurance cover to suit your needs.
Sources:
http://www.foe.co.uk/living/articles/car_sharing.html
http://www.direct.gov.uk/en/Motoring/OwningAVehicle/
HowToTaxYourVehicle/DG_10012524
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