As the rising cost of living reaches its tentacles into all areas of our lives, Countrywide looks back on how the costs for motorists have spiralled upwards and offers some options to help individuals mitigate these price rises to help keep their cars on the road.
Company Cars
Having a company car always seems as though it is a benefit. However, you end up paying for it one way or another. A company car is regarded by the MMRC as a BIK – or Benefit In Kind, which has its own rules and regulations when it comes to taxation.
Briefly, BIK tax is calculated by multiplying the car’s CO2 emission level, the value of the car when new, and your income tax bracket.
In April 2022, BIK rates increased by one per cent. For a tax payer who is in the higher bracket, this means that the car will be costing them at least another £107 more per year.
Road Tax
Anyone who has a car, whether it is in use or not, must pay VED – Vehicle Excise Duty. You might know it better as road tax, or car tax (in the old days you would have a coloured disc that you’d collect from the Post Office and stick it on the left hand inside of the windscreen).
April 2022 also saw the standard rate of VED increase by 6 six percent – £10 a year. Most people are now paying £165, not £155.
The higher the polluting levels of your vehicle, the more that you have to pay in tax. So for heavy polluters, you could be paying anything between £945 and £2365 per year. As for any car that has a list price over £40,000, they are also subject to a premium car tax of £355 (£10 more than last year) for the first five years it is on the road.
Fuel Increases
2022 has been a year of astronomical rises in petrol prices. Government figures highlight that at the end of March 2022, a litre of petrol cost £1.63, compared with £1.25 a year ago – representing an increase of 30 per cent. This means that the average 55 litre tank of petrol costs £21 more to fill than in 2021.
And electric cars have not escaped the hikes either. With spiralling energy costs (which no one can keep up with because they just seem to be going up and up), topping your car levels up is getting more and more expensive. The latest figures indicate that charging a standard EV with a 60kWh battery will increase from £9 to £14 (and rising!)
Tips to help you reduce car costs
Selling your car and jumping onto a bike is probably the most radical way you can reduce your car costs, but probably not the most practical. So here are a few ways you may want to implement or consider if you want to reduce your monthly outgoings.
- Slow down: did you know that driving at 70mph can use nine per cent more fuel than driving at 60mph. And cruising at 80mph can again use up to a quarter more fuel than at 70mph. Equally, sudden braking and accelerating can eat up more fuel. Slow down!
- If you’re parked up somewhere, turn your engine off. An idling engine will use for more fuel than the few seconds of fuel required for turning on your engine.
- Seek out the best petrol prices in your area. The difference in prices can vary quite considerably. Equally, fill up somewhere other than motorway service stations, which can be notoriously expensive as they have a captive audience.
- MOT your car at a council owned MOT centre. Do you know if your council runs a MOT centre? Though we are sure that a private garage does not unnecessarily fail cars, you can guarantee that your local council run MOT has no monetary incentive to fail you.
- Check your tyre pressure: Under-inflated tyres burn more fuel.
- Avoid hefty parking fines by understanding how car parking works. All car parks are legally obliged to display clear signage warning car owners of their acceptance of charges when parking their cars in private car parking areas. Ignorance is no defence if a car is logged as parked and sent a payment notice. Knowing your rights and responsibilities will prevent you from receiving unwanted and unexpected parking fines.
- Is your journey really necessary? Could you walk instead? Not only will this help to reduce the amount of petrol you use unnecessarily, but it will help you get fit and lose weight too!
If you manage a private parking area and are struggling with an increase in parking abuse on your site, contact us for ways in which we can help.
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