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11.5% Increase In New Car Registrations In January

New car sales in the UK finished strongly in 2012 and that has continued into 2013 with a further rise of 11.5% in new car registrations in January. The news is extremely encouraging for the industry in Britain but new research suggests that the rising price of fuel is changing driving habits across the country.

New car sales in the UK finished strongly in 2012 and that has continued into 2013 with a further rise of 11.5% in new car registrations in January. The news is extremely encouraging for the industry in Britain but new research suggests that the rising price of fuel is changing driving habits across the country. According to a report published by the Office of Fair Trading (OFT) fuel prices are rising for two reasons. Firstly the price of crude oil itself and secondly VAT and duty imposed by the government. 

 
Back In 2004 for example, a litre of petrol cost 80p. This was made up of 13p for the crude oil element, 59p for VAT and duty and 8p of margin for the producers. In 2012 however, the tax man took 81p while the price of crude had more than tripled to 44p. The oil company's cut, in contrast to some claims, has remained relatively stable at 11p. From 2007 alone the price of petrol has risen by 38% and diesel by 43%. This is in stark contrast to wages during the same period. Battered by the economic crisis, many people's wages have been frozen or, in real terms, reduced.
 
The effect this is having on driving patterns is marked. When questioned, 40% of motorists said they had responded to the rises by reducing the number of miles they drive while 6% claimed to have stopped driving altogether. Some 20% say they are now making every effort to drive more efficiently and another 6% have taken a bigger step to ditch their car in favour of a more fuel efficient model. A hardy 14% meanwhile say that rising fuel prices have had no impact on their driving habits. 
 
For some motorists though, the daily commute is a fixed cost and cannot be reduced. Research from Santander has shown that British motorists now drive an average of 3,326 miles annually to commute to work, spending an average of £840 on fuel in the process. Rising road tax is another area of concern with some groups pointing out the inherent unfairness in the system. A car that attracts a higher rate of tax because of CO2 emissions but covers fewer miles for example may in reality pollute much less than a supposedly more efficient car which clocks up many more miles. Some motor industry lobbyists are now suggesting that a fairer system would be to incorporate road tax into fuel costs which would mean that those who drive most would pay more. 

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