William, one of our motor trade insurance sales team at Plan Insurance Brokers gives us his personal views on the current cost of petrol.
As an individual who is constantly looking at their outgoings and expenditure I have noticed something that has brought me great delight.Petrol prices have fallen as of late.Driving around the outskirts of London I have seen prices that I would have never imagined a few months ago and I’m sure I speak for all drivers when I say that this is a breath of fresh air.
As I speak to motor traders on a daily basis I have noticed the effect petrol prices has had on their market as more and more people are buying cars with smaller engines to save money on petrol. This leads to lower profit margins for our road risk motor traders insurance clients as the vehicles with smaller engines are usually cheaper.
Therefore the mark up between the trade value and retail value is much less. Motor traders have to now consistently check petrol prices compared to the vehicles they are handling in order to stay relevant.
At first when I saw these cheaper prices I thought it was great news that could help revitalise the motor trade market but more in depth research has shown this to be just a short term low in prices. The AA have carried out an in-depth fuel price report and this has shown price averages have fallen from 138.40 down to 133.77. That massive 4.63p reduction makes a big difference.
In the month prior to this there was a fall of 4.08p which makes these drops the biggest since between November and December 2008.
The sad news that comes along with all these positive indications is the fact fuel duty will potentially be rising from the 1st of August 2012, if the plans go ahead all petrol prices will be whacked with an extra three 3p added to each litre in fuel duty.