1 in 3 motorists 'planning to downsize'

01/09/2009

With petrol prices on the rise, new research has indicated that 33 per cent of British motorists are planning to downsize their current vehicle in a bid to cut costs.

Another 50 per cent of drivers told comparison service uSwitch.com that financial circumstances mean they will hold on to their car for longer than they initially intended, with some 8.2 million Brits putting off buying a replacement for another two to three years.

The website found that despite the government's scrappage scheme, some 7.1 million drivers do not believe they will be able to afford a new car in the foreseeable future.

Of those who can afford to buy, 36 per cent said getting a car with good fuel efficiency is their top priority. Another 20 per cent said the size of a vehicle is the most important factor in the purchasing process.

Mark Monteiro of uSwitch.com said: "Consumers seem to be solely focussed on [ensuring] the longer-term running and maintenance costs are kept to a minimum."

The 2 pence rise in fuel duty that comes into effect today (September 1st) takes the average cost of filling a 45-litre fuel tank to £62, up 26 per cent since 2007, uSwitch.com noted.

However, Simon Glaister of the RAC Foundation told the BBC that the rise will actually be closer to 2.3 pence when VAT is included, taking the average price of a litre of petrol to 105 pence.

The Petrol Retailers Association has also warned that fuel prices will increase again when VAT returns to 17.5 per cent in January.

EuroDebt director Kevin Still said: "For individuals and families in financial difficult, it is important to budget for the costs of car maintenance and vehicle repair where switching cars is not an option.

"These costs often hit at the worst possible times in the form of a single lump sum to be paid.

"Making allowances for MOT, servicing and repair costs in your monthly budget is important so there is a buffer if and when your car needs to go to the garage.

"EuroDebt routinely includes allowances for essential vehicles as part of a Debt Management Plan or IVA. Rising fuel costs will hit everyone in their pocket and consideration will need to be given to adjusting allowances for commuting and other essential travel."

Tags; Advice on Travel Costs, Young Family Finances, Credit Card Lifestyle,

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