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Petrol Prices hit low Earners - Dec 2008

Even though the price of petrol has come down, the cost of filling the tank still has a significant impact the pockets of less well-off drivers. Access to a car and the benefits it can bring are becoming much more important in social policy according to Professor Stephen Glaister, Director of the Royal Automobile Club Foundation speaking at a conference on transport and social exclusion in Birmingham.

Professor Glaister will explain that the poorest households have experienced the most rapid growth in car ownership over recent years. Just like everyone else, low-income earners need to get to health centres and hospitals, shops, schools and work. Public transport can be costly and time consuming and as cars have become cheaper they have become as attractive to low earners as the better off.

Whilst the price of road fuel remains an important factor for the majority of UK households, Glaister will state that poorer households are particularly hard hit because they travel just as much as their richer neighbours. This causes problems for social policy, particularly in rural locations where there are fewer public transport alternatives.

Professor Glaister will highlight that car travel is often considered to be the preserve of the wealthy, when in fact 60% of rail travel is completed by the top two income groups. He will also reveal that lower income groups spend a similar proportion of their weekly income as high earners on operating personal transport.

Glaister will describe how taxes on the use of cars have grown in relation to taxes on ownership and that this relationship maybe reversed in the future if further fuel duty increases become politically difficult. If there is instead a policy of increasing the Vehicle Excise Duty (VED) on larger cars, this could be socially regressive, as those on lower incomes are less able to purchase the newer vehicles with lower emissions.

Stephen Glaister, Director of the Royal Automobile Club Foundation says;

'Fuel should not be priced as a luxury as car travel is essential for accessibility regardless of income. All income groups rely on roads for over 92% of their travel. People travel more as they get wealthier, but cars are now the most important form of transport for each and every income group. Fuel prices are becoming much more important in social policy. It is important that overall motoring policy and tax rates are set with this in mind.'

 

Consumers hold off car buying - 4 Dec 2008

‘Recent Government moves to address the economic situation should help stimulate the car market as we go into 2009, but we do expect to see some improvement this December, traditionally one of the quietest months for car dealers,’ said Sue Robinson, Director of the RMI National Franchised Dealers Association (NFDA), which represents UK car retailers, commenting on car sales figures for November 2008 announced today (Thursday 4 December 2008).

100,333 new cars were sold during November, 36.8 per cent down on 2007. *

Robinson continues: ‘The economic measures introduced in the Pre-Budget Report last month will take time to have an impact. Some consumers may have put off completing car purchases until after the VAT reduction took effect, so that they could take advantage of the 2.5 per cent saving.

‘Many more will be waiting for the resulting economic stabilization, and for credit to become more readily available before considering buying a new car.

Robinson adds: ‘The economy is unlikely to make a major recovery until banks start lending sensibly, to consumers, to business, and to each-other. When this happens, car sales will increase again.

 

Biggest-ever car discounts to get even bigger, says What Car? - 14 Nov 2008

New car discounts are at their most generous level in eight years and could get even bigger, according to research by What Car?.

Average What Car? Target Price savings stand at £1932, £244 more than at the beginning of the year and more than double the £974 average from 2001.*

That means it’s already a great time to get a cracking offer, but it could get even better for buyers as dealers become increasingly desperate for business in a plummeting new car market.

Official registration figures show that the new car market is down 23% but the true figure, taking out cars that have been registered by dealers, could be as much as 30% or 35%.

What Car? has heard of cars being supplied to dealers at 40% of their list price, so the prospect of the first half-price deal might not be far off. Internet broker Drivethedeal has a Citroën Xsara Picasso for £8568, which is tantalisingly close to this at 45% off the £15,616 list price.

Shop around and you can get a Ford S-Max or Galaxy for less than £15,000, for instance – but it’s not just big, or old, cars that come with big savings.

You can get 10% of the latest version of the Volkswagen Golf Mark with internet broker Carfile, and that’s before the first cars have even been delivered to their owners.

The Ford Fiesta has only just been launched as well, but you can slash 15% off the list price straight away by going to Motorlogix.

Our reigning What Car? Car of the Year, the Jaguar XF, is up for grabs at £2187 off the £31,616 list price at Drivethedeal. The same company can also chop an amazing £11,500 off a Jaguar XJ, dropping it to £33,764.

What Car? editor Steve Fowler said: ‘Even if you’re not comfortable haggling on a price, it should be simple to get a brilliant bargain at the moment.

‘With so few people dipping into their pockets, sales staff will be almost begging buyers to make an offer.’

 

Motorists could save more than £800 a year in fuel costs - Nov 2008

Europcar Economy Drive beats official MPG figures and proves renting could be cheaper than driving an older vehicle

New car sales may be struggling but Europcar, the UK’s leading vehicle rental company has proved that a relatively new car, combined with some simple driving techniques, can save motorists as much as £800 a year in fuel costs compared with driving an older vehicle. 

Europcar conducted its own Economy Run this Autumn not only to prove that the official MPG figures can be beaten but to demonstrate that renting a car – which is going to be relatively new - is cheaper than using an older vehicle.  In fact the cost savings from renting a new car can balance out the cost of the rental.

11 different sized cars were driven round the 125 mile circuit of the M25.  8 of the cars were from the Europcar fleet – and were therefore each less than a year old - while 3 were older cars ranging from 3 to 10 years old.

The run produced some interesting results, not least that smaller cars don’t always mean better fuel efficiency.

The 8 new cars achieved a 14% improvement over the combined fuel economy figures published by the Vehicle Certification Agency, with an average fuel consumption of 62.12 miles to the gallon.  The three older cars achieved a 3% improvement overall.

Perhaps surprisingly, it was the smaller cars in the test that struggled to improve upon the published MPG figures, while some of the larger cars comfortably exceeded them.  For example, a new Volvo V50 D5 Geartronic achieved 58.23 mpg, a 44% improvement over the published combined figure offering a potential saving on fuel of £800 per annum.  A Nissan Qashqai DCi achieved 70.33 mpg, which was a 30% improvement over published figures. And, a Peugeot 308 HDi 90 achieved a figure of 95.91mpg using just £7.24 of fuel on the 125 mile run.

Tim Bailey, Europcar’s Fleet Director said: “Our experiment shows not only that driving the newer cars will save you money, but also that the driving style adopted plays a huge part in the fuel economy you can achieve in the real world.  Modern vehicles such as those we tested from the Europcar fleet can achieve such fuel consumption figures that renting a car and driving economically as a package, can still be cheaper overall than using your own older vehicle – even allowing for the recent fuel price cuts. “

Comparing the old vs the new cars, the average fuel usage for the cars on the Europcar fleet was just under 9 pence per mile whereas the older cars averaged 14 pence per mile, giving the newer cars a 31% saving in fuel costs.  Also, from an environmental perspective the newer cars emit almost 34% less carbon. 

Tim Bailey concludes: “With an average of 500 miles per rental, at today’s fuel rates, a Europcar customer could save £21.18 per rental on fuel and produce around 15,000 fewer grams of carbon.  If you look at the miles driven each year by customers in our cars and assume they use our cars rather than older cars and drove economically, the saving they achieved was over £30 million.  This is clearly a strong argument for renting a car rather than using an older model.”

 

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