Slight Fall In Cost Of Running A Car As Insurance Prices FalL – AA Ireland

  • Average cost of running a family car for a year is €10,671.37, a decrease of €178.05 compared to 2016.
  • Stable fuel prices along with 10.2% drop in motor insurance prices key factors in declining cost.

The average cost of running a family car for a year is €10,671.37 according to the AA’s annual survey of motoring costs. The total is a decrease of €178.05 or 1.6% on the same figure for last year, according to the AA’s calculations.

Despite a minor increase of 0.46% in the cost of fuel, recent CSO data highlighting a drop in motor insurance premiums has helped reduce the cost of running a car. The CSO has found that the average cost of motor insurance has dropped by 10.2% compared to June 2016[1]. While that figure when factored into the AA calculations pulls down the annual cost the motoring organisation warns that many motorists will not have seen a saving yet.

Insurance costs remain the major consumer issue

“Motorists renew their motor insurance once per year so depending on when you pay you may not have seen any fall off in the cost yet.” Says Director of Consumer Affairs Conor Faughnan. “The best we can say is that when we compare August of this year to August of last the cost did not get any worse overall.”

The AA also warns that a year-on-year measure does not factor in the very hefty price increases that came along more than 12 months ago. Motorists saw prices jump hugely in a short period of time between 2014 and 2016 and they have remained high since.

“Rising motor insurance premiums have been the main issue faced by motorists for over two years now, and something which the AA has highlighted to government since the publication of our 5 point plan to tackle rising insurance costs in November 2015. While it appears some progress is being made in this space, in order for the trend to continue into the future and for motorists to ultimately start seeing their premiums drop it’s important that government continues to give this issue the attention it deserves.”

“In the meantime there are some things you can do to lower your costs,” Faughnan added. “If you have a spouse or partner then adding them to your insurance policy, as long as they have a clean driver record, can net you a discount of up to 20% and separately it’s always worth shopping around. Even if you receive a renewal quote which seems competitive call your current insurer and others to see if anyone can do better for you.”

Fuel costs relatively stable year-on-year; rising oil price off-set by rising Euro

Following a series of price drops in recent months the cost of fuel has remained largely in line with the price in 2016, increasing slightly by 0.46%. The average price of petrol at 131.9 cent per litre in July is up approximately 0.6c per litre on the price 12 months ago. For a typical motorist in a Band B car this means they will pay €1,561 for their year’s fuel, up from €1,554, with tax making up more than 60% of this figure.

“Oil prices have jumped around in the last 12 months, from highs of $57 around the turn of the year to lows of $43 a couple of months ago.” Says Faughnan. “Right now though the oil price is just a bit higher than this time last year which is offset by a stronger Euro, so our year-on-year comparison shows only a slight change.”


Each year the AA calculates average prices for each of the respective tax bands and illustrates the total cost of owning and running an average family car.  The cost of running a ‘Band B’ category2 car decreased by 1.64% in 2017 when compared to the 2016 figure of €10,849.42.

Other motoring costs did not change significantly with only slight adjustments to be made3. This is reflected in the AA’s calculation of the cost of oil, tyres, servicing, repairs, replacements and garage parking.

The AA calculates the annual cost of motoring each year using a holistic figure that includes the obvious things like fuel, insurance, servicing but also factors in a whole range of other costs. These include costs like depreciation and interest charges, as well as replacement for components such as tyres etc over the car’s life. The figure assumes a motorist that buys a new car and retains it for 8 years at an average annual mileage of 16,000 kms. All repairs, replacements and servicing are carried out as per manufacturer’s recommendations.

The full details of the AA’s Cost of Motoring analysis are available here.

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