Petrol Prices Put Squeeze on Finance Purchase Drivers

Petrol Prices Put Squeeze on Finance Purchase Drivers

by David Redmond on 20 Jan, 2011

It wouldn’t be unfair to say that poor credit car finance drivers are concerned about driving as cheaply as possible. So it would also be fair to say that petrol price rises may well be at the top of their list of worries at the moment.

Having risen during 2010, petrol prices look set to continue this trend during 2011 with the average cost of a litre of unleaded coming in at £1.21, with further rises expected. Added to this, petrol doesn’t come under the VAT exemption meaning that the rise to 20% will push prices even further up.

Estimates so far put the average fuel bill at £25 per month higher thanks to the increased petrol prices and the VAT increase. For the already squeezed transport budget of poor credit car finance drivers that makes a big difference.

The AA has accused retailers and oil companies of profiteering, but both point to the price of oil which has remained high for the past few years (remember when oil was $40 a barrel?) Retailers themselves claim they are struggling in the face of high oil prices.

It looks like the only way to save money on motoring this year will be to stop using the car so much. As ever though, this leaves people in rural areas where public transport is thin on the ground in a difficult situation. The government has touted a possible fuel discount for people in more remote locations, but it remains to be seen how much and how effective this will be.

Rising petrol costs affect all motorists, but it is the car finance drivers that will be hit the hardest by this. Many organisations are asking the government to examine the cost being passed on to motorists, but in the face of wide ranging budget cutbacks, motorists are unlikely to see much support from the state in the near future.

About the Author

David Redmond

David Redmond is a Partner of Don Gilliard Finance Group. He is a fee-only, independent financial advisor and financial planner. For over 15 years, he has been helping individual investors and their families realize their investment goals.