From car insurance to fees, how to cut down whopping £1200 yearly cost of running a car

From car insurance to fees, how to cut down whopping £1200 yearly cost of running a car

Car insurance policy increases and extra charges surrounding admin fees and excess mileage costs could see road users spending more than they are prepared to stay on the road. Costs could spiral even higher if some motorists forget to purchase one type of insurance which would mean they are responsible for paying for excessive repairs. 

Cars purchased on finance could be the worst-hit despite 2.4million motorists sitting up to contracts. 

With 2.4million road users spending £37.6billion on car finance in 2019 alone the extra charges could boost total costs above £15,500 each. 

Taking simple precautions such as shopping around for a new policy at the end of a contract can help road users dramatically reduce their overall costs. 

Car Insurance 

Car insurance policies can vary in cost for each motorist so it is almost impossible to tell how much could be saved with some simple changes. 

READ MORE: Running your vehicle is more expensive in this UK city

Motorists must make sure they purchase Guaranteed Asset Protection (GAP) insurance for a vehicle which has not been paid off. 

Go Compare says crashing a car worth £20,000 after paying off £8,000 means road users would still be viable for £12,000 in charges if GAP insurance has not been purchased. 

Third-party charges 

Finance deals can be purchased from a range of providers and motorists should not be pushed into accepting a finance agreement suggested by a car dealership. 

However, this could cause prices to increase as some dealerships may add an extra charge for using a third-party provider not associated with their company. 

Excess mileage charges 

Admiral car insurance says motorists who exceed their mileage could face extra charges on their yearly running costs. 

Finance contracts are based on motorists sticking to their annual mileage limits and road users could be fined hundreds of pounds for exceeding their terms. 

Admiral analysis shows an extra two miles per day could result in an extra 3,000 miles by the end of a four-year agreement which will see £286 added to your total charges. 

Excess mileage charges also apply to road users who have decided to lease a vehicle. 

Most leased vehicles have an annual mileage cap of between 10,000 and 15,000 and road users could be hit with massive charges for exceeding this. 

Motoring experts Lease Fetcher says road users could pay anywhere between 4p and 70p extra per mile if they have exceeded their agreed limit. 

Published at Tue, 18 Feb 2020 10:52:00 +0000