Owning a Car

Introduction

Owning a car is a major responsibility and can be surprisingly expensive. The learner driver faces not only the cost of buying a car but also insuring it, taxing it, obtaining an MOT certificate for it, filling it with fuel and maintaining and servicing it. There are optional extras such as breakdown cover that also add to the total price of owning a car.

Although there are millions of cars on our roads, all ranging in price, quality and fuel consumption, the following is a breakdown of the cost of owning a typical small UK car.

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The Cost of Owning a Car

The following annual cost analysis is based on a Renault Megane 5 door hatchback; 1.6L, petrol engine, first registered August 2005 with 22,000 miles on the odometer. It is also assumed that car purchase is funded buy a three year car loan at 8.8% APR.

The car insurance cover assumes an 18 year old male driver, currently living with parents. The cover also assumes a usage of 12,000 miles per annum and that the driver has 0% No Claims Discount. The insurance cover is fully comprehensive with a £500.00 excess.

Please be aware that this analysis is solely intended to highlight an order of cost of owning a car and is not a definitive analysis of running costs of this particular vehicle. Maintenance, servicing and insurance costs can greatly vary.

For more information on each of the elements of owning a car and what each entails, just click on the appropriate link.

The total annual cost of £7,104.10 equates to £592.00 per month. As you can see, the decision to buy and run a car should not be taken lightily. In this particular case, the running costs are fairly significant. Note however that once a new driver starts to accumulate ‘No Claim Discounts’, the insurance premiums should reduce on a yearly basis making the cost of owning a car that bit more affordable. This obviously assumes that you have no accidents and don’t make any other claims on your policy.

Please also note that breakdown cover, car tax, maintenance and servicing are usually one-off payments: the above monthly payments analysis assumes that you would save in advance for each of these bills, ie: the first service occuring 12 months after first owning the car.

Responsible Motoring

There are many drivers on Britian’s roads who do not insure or responsibly maintain their cars. What at first seems a much cheaper and more affordable way to run a vehicle is in fact significantly more dangerous and could end up costing you more than the normal running costs of a car: you could kill yourself or another road user, you could be heavily penalised financially or you could even be given a custodial sentance.

Consider the likely outcome if airline pilots didn’t undertake a very thorough cockpit drill or that an aircraft was not appropriately maintained or serviced. I bet you would be extremely nervous boarding a plane for your summer vacation.

It’s essential that all road users and car owners fully follow the rules and safety procedures set in place by the Government. This includes a degree of common sense being applied by road users as to the state, condition and road-worthyness of a car. If in doubt, get the car checked out by a mechanic, double check that you have the appropriate insurance and have paid all statutory fees associated with car ownership. The responsibility is your’s – do the right thing: don’t be a fool.

Booking a Theory and Hazard Perception Test

How to Book your Theory Test and Harzard Perception Test

Before you can sit your full driving test, you first need to sit, and pass, the driving theory and hazard preception test. For a general review of the format and structure of both of these tests, just click on Theory and Hazard Perception Test. Note that the theory test and hazard perception test take place immediately after the other – for simplicity, we will refer to both of these tests as the theory test.

Prior to booking the test, you must first ensure that you have a fully valid Provisional Driving Licence and must have a means of paying the £31.00 test fee.

There are three ways that you can book your theory test, as follows:

1) Online

To apply online, click Book your Theory Test and simply follow the online instructions. Note that in order to complete the online application, you require a valid UK driving licence as well as a credit or debit card for the £31.00 payment. Also note that Directgov operate on behalf of the DVLA.

2) By Phone

To apply by phone, just call 0300 200 1122. Note that in order to complete the phone application, you require a valid UK driving licence as well as a credit or debit card for the £31.00 payment. Also note that Directgov operate on behalf of the DVLA.

3) By Post

To apply by post, you will need an application form. You can either request an application form online, or by calling the telephone booking line on 0300 200 1122. The £31.00 payment can be made by either cheque or postal order: not cash.

Note:

If you need to cancel or reschedule your theory test, you can do this either over the phone or online. As long as you give the Driving Standards Agency (DSA) at least three clear working days notice, you can 1) cancel your existing appointment, 2) move or change your appointment or 3) request a full test fee refund.

Before you sit your theory test and hazard perception test, why not try our full 50 question mock theory test. Just click on Mock Theory Test and see if you’re ready for the full formal theory test.

To find your nearest Theory Test Centre, just click on Theory Test Centres for a full alphabetical list of all UK centres. The test centres are generally well decorated and are not as intimidating as you would think.

As long as you have studied for the theory test and the the hazard perception test, passing should not be a problem.

Car Insurance – The Basics

Car insurance is a legal necessity in the UK, and so as every motorist has to have it, it’s important to understand how it works and what to look for in a policy. Here we look at the key components of car insurance to put you on the road to a better deal.

What is car insurance?

Depending on the level of cover you take out, car insurance can help drivers cover the cost of driving related damages and injuries. There are three levels of car insurance cover available:

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Third party car insurance: The minimum level of insurance, it covers liability for injury to others, including passengers; liability while towing a caravan or trailer; and damage to property
Third party fire and theft car insurance: The same as third party cover but with additional protection against fire damage, theft of your vehicle and damage caused by theft.
Comprehensive car insurance: Covers everything offered by third party fire and theft but with additional cover elements that vary from insurer to insurer but typically include: loss or damage to your vehicle; accidental damage; personal effects; windscreen cover; and more.
What influences car insurance premiums?

When you take out car insurance, insurers ask a number of questions to help identify the risk they are taking on. The higher they perceive this risk to be – i.e. the more likely you are to make a claim – then the higher your premiums are likely to be.

This perceived risk is influenced by a number of factors including:

The vehicle you drive – How much it’s worth; its age; repair times; damage and parts costs; body shells; performance; and security. The Association of British Insurers classifies cars into groups from 1-50 with those appearing in lower groups qualifying for cheaper premiums.
How you plan to use the vehicle – Will you use the car for day to day driving only; for commuting; or will you use it for business or commercial travel?
Your address – Where you live influences premiums because certain areas have higher volumes of traffic increasing the likelihood of an accident; and some areas have higher crime rates increasing the chances of theft or vandalism.
Your circumstances – Insurers look at a driver’s claims history; whether they have driving convictions; medical conditions that may affect their ability to drive; their occupation – some jobs are higher risk, such as when someone carries goods in their vehicle; and their marital status – married drivers are generally considered more responsible.
Mileage – The more time you spend on the road, the more likely you are to have an accident.
Additional drivers – Insurers will look at any named drivers on your policy. Experienced drivers with clean records may even earn discounts on a policy, but younger drivers, under the age of 25, or drivers with poor driving records are likely to increase premiums.
Why is protection against uninsured drivers important?

If you are in an accident with an uninsured driver in which they are at fault, they do not have cover in place to repair your car or pay for medical expenses. According to the Motor Insurers Bureau in 2007, there were 1.7million uninsured motorists on the UK’s roads with the AA estimating that they add around £40 to every policy bought by law-abiding road users.

What is a no-claims bonus and why is it important?

A no-claims bonus is effectively a reward for those that don’t make a claim on their policy. This discount applies on a ‘no claim’ basis and not on a ‘no blame’ basis – so if you make a claim for an accident that wasn’t your fault, it will still affect your no-claims bonus unless your insurer recovers its costs from the other driver’s provider.

Generally for every claim you make you will lose two years’ no-claims bonus; and most policies apply a limit on their discount levels – typically around four or five years. Not only do no-claims bonuses potentially lower premiums, but they also encourage safer driving.

What is no-claims discount protection?

Once you have reached the maximum discount level you can normally pay an additional premium to protect your no-claims bonus. This means that if you make a claim you will still receive the maximum discount on the policy – although there is a cap on the number of claims you can make before you lose this protection.

Crucially, don’t assume that because you have built up a no-claims discount your premiums cannot rise. The discount is taken off what you otherwise would have paid – and premiums could still increase based on other risk factors.

What is an excess?

An excess is the amount you pay towards a claim. Generally this is split into a compulsory excess – an amount set by your insurance company; and a voluntary excess – an additional amount that you choose to pay towards a claim. The voluntary excess should always be set at an affordable level in case a claim is necessary.

FREY WILLE |