Motoring news - Low-income drivers may benefit from low-mileage insurance

Car insurance news - Rising fuel tax has been lowering drivers' mileages

Motorists with low-mileage insurance policies already drive a limited amount of miles every year, however, a recent report has revealed that drivers who live in rural areas or earn lower-incomes may have been driving less than wealthier motorists as a result of rising motoring taxes.

An AA/Populus survey in May 2011 of 11,548 members showed that motorists with a lower-income were significantly more likely to have reduced their car use or cut other spending. In some cases motorists had done both.

Further, a July 2011 poll of almost 16,000 motorists showed that 28% of people spent a set amount on fuel, and since prices have increased by 16p-18p over the last year, it is poorer motorists who have been largely affected.

The old system of setting annual fuel duty relied on taking into account current social and economic conditions and was not based on inflation as the system is now. In response to their findings, the AA has written a letter to Chancellor George Osborne in a bid to revert back to the previous system.

AA president Edmund King has written, "Motorists do not understand the logic of high fuel duty rises which further increase RPI and force demand down at a difficult time for family and business budgets which need mobility to stay afloat.

''Although we fully recognise the need to balance the books we also believe the time has come for activity to be stimulated through lower pump prices.''

Many drivers who do not frequently drive long distances have found cheaper car insurance quotes by seeking low-mileage insurance policies.