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MONEY COMMENT
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According to the latest press release from motoring organisation RAC (LSE: RAC), it costs a staggering £104 a week to own and run a typical car. This figure takes into account the cost of depreciation, insurance, fuel, servicing, VAT and breakdown membership. Of course, averages invite comparisons, and this figure varies hugely from car to car. To own and run a BMW 735i costs around £323 a week, which is £260 a week more than the cheapest car in the RAC's list, the Toyota Yaris, at £63. The cost of motoring accounts for almost a quarter (23%) of the average disposable income of £451 a week, and adds up to around £5,400 a year. However, according to the quarterly RAC Insure Motoring Index, annual motoring costs fell by almost £95 during the second quarter of 2003. This was due to a drop in fuel prices after the end of the war in Iraq, a fall in the cost of buying and financing a car (due to increased competition), and an improvement in the residual values of used cars (or, to put it another way, reduced depreciation). It's important to note that depreciation and fuel together account for three-fifths (60%) of our motoring costs. In fact, the RAC calculates that depreciation costs the typical motorist a whopping £42 a week, whether a car is being driven or not! If you drive 12,000 miles a year, which RAC claims is the average mileage, driving a typical car will cost you around 45p a mile. My annual visit to Cornwall involves a round trip of about 475 miles, which will cost roughly £214. That's getting on for one week's apartment hire, which is a sobering thought. So, if you want to cut the cost of running your car, or the price of your next vehicle, read on: More: Visit our Insurance and Personal Loan Centres | The Fool's Car-Buying Guide.