The cost of insuring the average sedan is going up alongside the total cost of owning and operating it, according to figures released Tuesday by the AAA.
Average annual insurance costs are $1,029, according to AAA, which accounts for 11.3 percent of the total cost of owning and operating a sedan. The figure is $28 and about 2.8 percent higher than last year, according to the AAA.
It is the second straight year of increased insurance costs. Last year, the cost of a policy was $1,001, or 3.4 percent higher than in 2011. In 2011, the yearly cost was $968, or 6.1 percent less than in 2010.
The policy used to calculate the cost of insurance was a full coverage policy for a married 47-year-old man living in a small city with a clean driving record whose daily commute to work was between 3 and 10 miles. That driver profile is considered low-risk, so high-risk drivers would likely have to pay more for coverage.
The AAA said its estimate of insurance costs showed that all sedan sizes saw “modest increases,” but large sedans saw a lesser increase for the cost of coverage.
Other Costs Rising Too
The overall cost of owning and operating the average sedan is $9,122 a year, a nearly 2 percent increase over last year’s figures. The increase also represents 1.17 cents more per mile than last year, with the average sedan driving 15,000 miles now costing 60.8 cents per mile.
The cost of maintenance showed the biggest jump in this year’s estimates from AAA, rising about 11.3 percent from last year to its current cost of about 5 cents per mile for the average sedan.
“Driving the increase in maintenance costs is significant increases in labor and part costs for some models and a major increase in the price of extended warranty policies due to high loss ratios by underwriters,” the AAA said in a statement.
Fuel costs rose by nearly 2 percent from last year, but the average cost of regular fuel used by most sedans is estimated to be 3.8 percent higher than last year. The AAA said the difference can be attributed to “small improvements in fuel economy ratings” in other vehicle models that brought down the overall average cost of fuel.
references: http://www.bbc.co.uk/news/uk-politics-21790567
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