How to Beat the Rising Cost of Car Ownership
Published: 7 April 2011
By MoneyHighStreet Staff Leave a Comment
Updated: 26 August 2011
In post recession Britain, the economy still suffers from tremors caused by its not so distant turbulent past. It’s a fragile state of affairs and the cost of car ownership continues to escalate to sky high levels due to ever increasing fuel prices, rising car insurance costs and as an after effect of the VAT increase to 20%.
Despite the governments promise to address this issue – resulting in a 1p fuel duty cut and 1 year delay in planned fuel duty hikes – little has been done to realistically address this issue such as reducing fuel duty by a meaningful amount in the short-term.
In a survey carried out by moneysupermarket.com following the budget announcements, to which 7,300 consumers responded, 86% said the 1p fuel duty reduction would make no difference to their day to day finances.
Kevin Mountford, the comparison website’s financial expert said: “Yesterday’s fuel duty reduction of 1p per litre is a step in the right direction but doesn’t go far enough to really make a difference to despairing motorists. Fuel prices have escalated higher than many people would’ve expected and UK drivers are desperate to see costs come down to a more affordable level.
Motorists are all also being hit hard in the wallet by the rising cost of car insurance. Our recent research showed car insurance prices increased by 31 per cent from January 2010 to January this year – or 44p per day, and unfortunately there still aren’t signs of increases slowing down.”
So let’s take a look at what you can do to reduce the cost of car ownership:
Money Saving Tips
- Don’t get stuck with your old insurer: It’s easy to be complacent and forget to look for a new policy when you get that yearly renewal reminder from your insurer, perhaps putting off for another day; but this is a mistake that will cost your dearly.
UK motorists waste billions each year by letting their renewal lapse and sticking with their current insurer. Don’t fall into the trap, start looking for another car insurance policy about a month before the old one runs out.
- Shop around: To ensure sure you get the best deal – and shave some money off your premium in the process – make sure you use a price comparison website to allow you to run quotes with many insurers in one go.
Don’t forget to also visit a couple of direct only insurers such as Direct Line to make sure you get a comprehensive selection of quotes. Shortlist to 2-3 contenders and then compare them against each other, choosing the policy which gives you the best value for money vs. the right features for your circumstances.
- Find the cheapest fuel: Don’t just fill up at the nearest petrol station to your home or place of work; you’ll more often than not pay for this convenience.
Fuel prices can vary greatly in your local area, meaning you could be losing out on a 3-5p saving per litre just by not looking around. If you fancy being lazy, just use a website such as petrolprices.com (they even have a handy iPhone app) to keep you up to date with the cheapest garages in your area.
- Lift share: If you live near to someone you work with, or can stop off and get them on your commute, why not suggest a lift share and halve your monthly fuel bill.
Better still, if you have a bike (and live close to work), why not commit to cycling in to work a couple of days a week, you’ll save money and get fit in the process.
- Change your driving style: It’s easy to make a quick saving by making your driving style more fuel efficient. Avoid harsh acceleration and sudden braking, instead reading the road ahead to allow you to moderate your speed.
If your car has an average MPG function, make a game out of trying to get the figure as high as possible by driving slowly and staying in as higher gear as possible.
- Make yourself more attractive to an insurer: car insurance policies are calculated on risk, so examine anything you can do to decrease your risk to the insurer to bring your premium down.
Easy ways to reduce your risk and benefit from a saving are; decreasing your annual mileage (keep this accurate though) and looking for a different way to describe your profession (your job can make a big difference to the price of your policy).
Improving the security of your vehicle by adding an alarm if it doesn’t have one, or perhaps using your garage to store the car in overnight and reporting this to the insurer, should also bag you a discount.
- Carry out regular servicing: It might sound counter-productive but it’s vital you keep your servicing up to date to ensure your engine delivers its maximum fuel efficiency. You’ll also be increasing the longevity of your engine in the process.
The most beneficial part of the service is the oil change and air/oil filter renewal so aim to do this regularly (follow the guidelines documented in your cars instruction manual).