Car insurance cost declines eroded by surge in fuel prices

Any savings Irish motorists might make as a result of reported falls in the cost of car insurance are being offset by a significant rise in the cost of motor fuel, a new survey has found.

According to the AA’s annual survey of motoring costs, the average cost of running a family car when fuel, insurance, servicing, depreciation and interest charges are totted up comes in at €10,691, up €20 on last year’s figure.

The data suggests that in spite of CSO figures which have pointed to a drop in motor insurance prices, a recent spike in petrol and diesel prices on garage forecourts across the State has offset any potential savings for motorists.

The CSO’s Consumer Price Index suggests that the average cost of motor insurance dropped by 11.5 per cent between June 2017 and June 2018, while the AA’s monthly fuel prices survey suggests the average cost of a litre of fuel has risen by 9.9 per cent over the same period.

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The average price of a litre of petrol was just under €1.48 in June, an increase of more than 13 cent in 12 months. For a typical motorist in a Band B car this means they will pay €1,707 for their year’s fuel, up from €1,553 last year.

‘Insurance crisis’

"The latest findings from the CSO are certainly welcome. However, we need to be mindful of thinking of the insurance crisis as a battle won," said AA director of consumer affairs Conor Faughnan.

He said while the news of falling car insurance is positive, many people, particularly young drivers, drivers who have spent a number of years abroad, or those with past claims, do not have such a positive outlook when it comes to getting on the road.

“If we are to get to a position where most motorists start to see savings on their insurance, then there is still a great deal of work to be done,” Mr Faughnan said.

He described the jump in fuel prices as “the greatest concern for average motorists” and said it had left “a significant hole in wallets across the country”.

He pointed to drops in the cost of crude oil recently, suggesting that could signal a slowdown in the increase at the pumps, but said “the vast number of factors which play a role in what we pay for fuel make this far from a certainty”.

He repeated calls for a reduction of taxes and duties on motor fuel. “As a nation we have a long history of under-investment in public transport, particularly in rural areas, and it’s simply unfair to put such significant expenses on those who have no alternative to the private car to get to work.”