The cost of running a car in Britain became even more prohibitive today as the Government's 2p increase in fuel duty came into effect, pushing the price of unleaded to about 98p a litre. And with a further 1.84p rise due in April 2009, now is the time to start looking at options to reduce your motoring costs.
The timing of today's fuel duty hike could not have been much worse, with oil prices reaching record highs of over $83 per barrel last week. While shopping around for cheaper finance and insurance could save you money, it may be time to start thinking outside the box to reduce your motoring costs.
Alternative fuel types
Last week, we examined the pros and cons of hybrid cars and found that these can cut your costs significantly, especially if you clock up high mileage and/or commute to central London regularly. In addition, they attract lower insurance and tax costs, and have a good resale value.
Another increasingly popular option is to convert your car to run on LPG – Liquid Petroleum Gas. The conversion will cost about £1,500-2,000, but it should effectively half your fuel costs, cut vehicle tax costs and exempt you from the London congestion charge. Again, this would appear to be an especially good idea if you clock up high mileage and travel to London regularly. It also makes sense if you drive a vehicle that has high fuel consumption.
While diesel costs were also affected by today's fuel duty hike, they remain significantly cheaper to run compared to petrol cars. The average diesel car will be about 30% more fuel economic than its petrol counterpart. Also, with diesel hybrids due out in 2010 and the possibilities of bio diesel, these could be the cars of the future.
If you like to own a new car and trade in on a regular basis, you should closely examine the rate of depreciation of your vehicle. While the average rate of depreciation over three years seems to be about 40%-50%, surveys show that some models can depreciate by up to 90%.
So the next time you think about buying a new car, compare the resale value of the model you are interested in and try to buy one that will be worth at least 50% of its original value in three years time.
While depreciation may burn a hole in the pocket of new car buyers, it can be a great money-saver if you buy second hand. You can get a three-year-old car in excellent condition at a fraction of its original cost. For example, a three-year-old Ford Mondeo with 30,000 miles can be had for less than £7,000, compared to £23,000 new.
Cut down on mileage
If at all possible, you should also try to cut down your mileage. Do yourself and the environment a favour and buy a bike, or even a moped, for those shorter journeys. Also, consider using public transport. If you keep your mileage at a minimum, you could save on insurance costs.
Reduce service costs
You can also use your consumer power to cut the cost of maintaining your car. Taking your car a main dealer for servicing can be very expensive. Try to find a reliable smaller car servicing company instead, and you could halve the cost of maintaining your car. Or if you are feeling adventurous you could even service the car yourself. You would be surprised how little there is to it.
However bear in mind your manufacturer's warranty as many car makers stipulate that your car has to be serviced by an authorised service centre using approved parts to maintain its' warranty.