Rising Running Costs Affect Car Loans

In the space of just one year, the cost of running a car in Northern Ireland has risen by £2,105, putting car loans at risk.

The AA has found that rising petrol prices and road tax have pushed up costs, further compounded by heavy resale losses. As a result, the cost of driving has risen at four times the rate of inflation.

4x4 drivers are the hardest hit due to heavy taxes imposed on 4x4 drivers, which have resulted in a rise in price of around 22% compared to last years costs. But 4x4 drivers are by no means the only victims, with the average family car seeing a rise in costs of around £601 since last year.

Despite these alarming hikes in prices, Northern Ireland is still performing better than the rest of the UK when it comes to the cost of running a car. AA spokesman Luke Bosdet says:

“Petrol and diesel costs are down on the national average of 12% and 11% respectively. Northern Ireland insurance figures have remained a lot more static than in other parts of the UK, which is why the increase in running costs hasn't been as big.

But drivers in Northern Ireland are still paying significantly more than this time last year.”

Government imposed road tax has significantly reduced car resale values, meaning that many are left paying off car loans that far outweigh the current value of their car.

Due to the drop in resale values many are put off selling their car even though they cannot afford to run it. Selling would mean a loss too big to swallow, leaving them still paying off car loans for a car they do not even have.

Carys is an author of several articles pertaining to Car Insurance. He is known for his expertise on the subject and on other Business and Finance related articles.