Drivers start 2023 facing a rolling hike in price increases, inside the car and out – from the sky-high costs of learning to drive for young people to the increasing cost of insurance for the older drivers, not to mention new emission charges for older cars. And the costs come as drivers are facing rising economic pressure outside of the car, with food going up, mortgage rates soaring, and a recession likely, according to Bryn Brooker, head of road safety for Nextbase.
The largest price rollercoaster for drivers in recent years has been fuel. Prices peaked at 191p in July as the world struggled to respond to the war in Europe. They have now come off that peak and sit at around 156p – well above where it was before the war.
While this is encouraging continued instability could soon send petrol prices spiralling again – and then there’s fuel duty. Back in November the Office of Budget Responsibility forecast a hike in fuel duty worth 12p a litre in the March Budget, the first hike since 2011.
The Office is funded by the Treasury, but Chancellor Jeremy Hunt soon told reporters that this was not yet Government policy, and no decisions had been made. That means this 12p hike – worth about £6.60 for a 55-litre tank of fuel – is not definite, but is far from off the table, as the Government is scrambling to find savings.
The Government’s 5p reduction in fuel duty is unlikely to stick around forever.
Drivers looking to save on fuel costs should avoid dangerous methods like hyper-milling. Instead, make sure you aren’t driving around extra weight for no reason, turn down the heating on warmer days, and make sure your engine is performing well.
Car insurance set to keep rising
Car insurance rose by 14% over the last year, with the average premium hitting £586. That rise came as people returned to the roads after the pandemic, lifting the overall rate of payouts and thus premiums. As other costs rise across the board, that will mean the cost of every claim will get larger too – so premiums will go up with them. This is especially the case given how complex cars are these days, and the long wait times to get parts like semiconductors.
Insurance hikes don’t impact everyone equally. Male drivers pay on average more than female ones. Older and younger drivers pay more than middle-aged ones. These costs are all based on huge amounts of data – and don’t take into account how good your actual driving is at all.
Luckily there is a way to seriously reduce this cost. A dash cam for as little as £59 will show insurers you’re happy to have your driving inspected in the case of a crash – our research suggests this lowers the costs of premiums by about 30%, meaning you make back the cost of the dash cam pretty fast.
And in the event that you are in an incident through no fault of your own, a dash cam will prove this, meaning you get to maintain your “no-claims bonus”. These add up to thousands of pounds of savings over the years – certainly not a bad return for £59.
New emission zones will cost drivers of older cars hundreds of pounds
Low or no-emission zones are popping up around the country in a bid to clean up the air. The largest one planned for 2023 is the expansion of the ulta-low emissions zone to cover all London boroughs, which is set to occur on 29 August.
All cars that don’t meet the requirements of the zone will have to pay £12.50 a day to drive anywhere in London, every day except Christmas Day. Just driving on working days for the rest of the year in a car liable for the charge will set you back £1087.50.
It is likely that your car will be exempt however – London’s Mayor says four out of five cars are clean enough to not get a penalty. And if you are driving an older car you might be eligible for a scrappage scheme that will help you pay for a newer vehicle.
London isn’t alone in strengthening or introducing new low emissions zones. Glasgow’s existing zone is set to be strengthened, meaning visiting drivers will face a £60 fine if their vehicles do not meet the standard. Sheffield is introducing a new zone from February 27 – but this will not immediately cover private drivers.
The trend is somewhat clear however. Grace periods for drivers in several other cities like Edinburgh, Dundee, and Aberdeen are ending in 2024. Emission zones don’t require everyone to switch to an electric vehicle – but if you are driving an older car with high emissions you could face a series of charges all over the country.
