Low mileage news - Telematics car insurance saves money for tax payment

Car insurance news - Telematics car insurance and excessive tax and duty

Telematics car insurance customers, who have hopefully saved money on their annual motor cover as a result, may be alarmed to discover that the portion of their further motoring costs which goes to the government in taxes may not be benefitting them.

A report by The TaxPayers' Alliance (TPA), an independent British organisation which campaigns for lower taxes, has shown that a large amount of the road tax and fuel duty some motorists pay is not reinvested into their local road network.

In 2009, a reported £31.5 billion was raised through vehicle tax and fuel duty – £9.9 billion was spent on improving and maintaining the highways, while the estimated ‘social cost' of road transport emissions was £3.5 billion.

This means that just £13.4 billion of the £31.5 billion raised was spent on improving infrastructure and that drivers in the year 2009 to 2010 paid an ‘excess' of £18.1 billion in total.

Furthermore, because some regions of the UK are spending more on local roads than others, some motorists are benefiting from road improvements in their area for which they have not had to pay in full, while others are paying more money than is subsequently spent on local road maintenance.

This means that some road users, including low mileage drivers, could be paying out a much greater amount on taxes than is eventually reinvested if they live in a part of the UK which is not using the full amount for local highway maintenance and network improvements.

Luckily for road users with telematics car insurance they may not be as out of pocket as some others, due to the money they save by proving themselves to be safe and considerate drivers.