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Typical Scenario
Within Goring and Streatley a car club might reduce the ownership of second cars. For example, a two year Ford Fiesta 1.2L has the following characteristics:
The costs of running the Fiesta are as follows:
The above costs are very conservative and the costs for a larger or newer car they would be considerably higher. In addition, the servicing and replacement parts may be understated, e.g. a pair of new tyres £120, new washer blade £10, MOT £50, car wash £4, can of engine oil £10. Costs that are often conveniently forgotten are the capital used to purchase the car and depreciation. The cost of that capital can be calculated by determining the cost of borrowing, or alternatively the lost interest if that sum was invested. The latter gives a more conservative cost and is used in this scenario. The depreciation cost is money down the drain. Therefore the following needs to be added to the costs above:
The above grand total cost gives the following:
The costs for a typical car club are as follows:
This gives the following costs:
As can be seen the use of the car club gives a saving of at least £507.
- A value of £6,000 at the beginning of the year and depreciation of £1,500
- A fuel performance of 40 miles per gallon
- 8,000 miles in a year and used for an average of 15 hours per week.
The costs of running the Fiesta are as follows:
| Excise Licence | £115 |
| Insurance | £350 |
| Servicing & Replacement Parts | £300 |
| Fuel @ 100p/litre | £900 |
| Sub-Total | £1,665 |
The above costs are very conservative and the costs for a larger or newer car they would be considerably higher. In addition, the servicing and replacement parts may be understated, e.g. a pair of new tyres £120, new washer blade £10, MOT £50, car wash £4, can of engine oil £10. Costs that are often conveniently forgotten are the capital used to purchase the car and depreciation. The cost of that capital can be calculated by determining the cost of borrowing, or alternatively the lost interest if that sum was invested. The latter gives a more conservative cost and is used in this scenario. The depreciation cost is money down the drain. Therefore the following needs to be added to the costs above:
| Depreciation | £1,500 |
| Lost Interest on £6,000 @ 5% pa | £300 |
| Sub-Total | £1,800 |
| Grand Total | £3,465 |
The above grand total cost gives the following:
| Cost per Mile | £0.43 |
| Cost per Week | £67 |
| Cost per Hour | £4.44 |
The costs for a typical car club are as follows:
- Monthly Charge of £12.50
- Hourly Charge of £3.60 (including petrol).
This gives the following costs:
| Monthly Charges per Year | £150 |
| Usage Charges per Year | 2,808 |
| Grand Total | £2,958 |
As can be seen the use of the car club gives a saving of at least £507.
NigelW |
Latest page update: made by NigelW
, Nov 17 2007, 12:55 PM EST
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