Every Friday I publish “Frugal Friday!“, an open-ended series with some of the simple and best ways to really save you money both now and in the future.
This week I am concentrating on cutting down the costs associated with owning your car. Nearly everyone has one, nearly everyone needs one, and nearly everyone pays more than they need to for the privilege.
Cut Your Insurance Costs
Get Comprehensive Cover
Despite the lesser cover that third-party insurance provides, unbelievably the quotes are usually more expensive than if you had taken out comprehensive cover in the first place.
Always shop around for your insurance using price comparison websites to see how the quotes come up (GoCompare, MoneySupermarket, Confused, Compare The Market). Phone your present insurer and see if they can beat it if you’re otherwise happy with the service they provide. Remember, not all insurance providers are on price comparison websites (such as Direct Line), so be sure to get separate quotes from them as well.
Pay In Full
It may seem convenient to your budget to pay over 10 or 12 months, but invariably you will be stung by the company for doing so, as in effect they are loaning you the money to get the policy. APR’s range from 15-30% for this ‘privilege’, so if you can always always always pay for your policy in one go.
This has the advantage that if your vehicle is written off in an accident, you do not continue paying for car insurance on a car you no longer even own.
Up Your Excess
If you are not already penalised for being a young or inexperienced driver, then up your excess (deductable). The quotes vary wildly when you change your excess from £100 to £500. Be sure you will be able to access such an amount in the event you need to make a claim though, as this will instantly be taken out of any payout you get. Any claims under your excess you will be expected to meet in full.
Hopefully this one is obvious, but if you drive like Jensen Button but on the M3 rather than Silverstone, you will end up having an accident, getting stopped by the police or if really unlucky, both at once. Not only do insurance claims knock up your costs, but so do points on your driving license.
Play With Your Job Title
I am not suggesting outright fraud here, but there is no escaping the fact the work you do has a very real impact on the cost of your premium. Martin Lewis over at Money Saving Expert has put together a job title picker to see if you could save money by tweaking your job title. Remember the general rule of thumb: If a family friend would agree on the spot that is a reasonable job title for the work you do, it is reasonable to give it to the insurance company. Don’t outright lie though, if the company finds out during a claim you could find your cover nullified.
Purchase via a Cashback Site
Once you have found a quote you are happy with, see if you can get the same quote again but via a Cashback site. You could find an insurer paying you £25-£150 for taking out their cover in doing so! Check out the CashBack Optimiser to see which site pays the most for the company you’re looking at.
Cut Your Fuel Costs
Just as I advocate shopping around for your insurance, shop around for your fuel as well. Costs in a 10 mile radius can vary by as much as 15 pence a litre, so it pays to spend a moment to check PetrolPrices.com and see who is charging what today before you go fill up. The site requires registration but is completely free.
Do Not Fill Up
Unless you have a long journey ahead, do not fill your tank right up. If you want to be really frugal, don’t go much beyond half a tank at any one time. Fuel is heavy, and your engine will have to work harder to move the car and its contents around the more it weighs. This tip won’t make you rich overnight, but over the course of the lifetime of the car, it could save you hundreds of pounds.
Empty The Boot
If your vehicle is anything like mine, the boot becomes a storage cupboard over time. Anything not immediately required seems to end up in it somehow. In much the same way as the extra fuel weight means less miles per gallon, so does the extra weight of the rubbish in your boot. Keep it regularly spring-cleaned, and only carry around what you really need day-to-day. Every additional 50kg of weight you carry in your car increases fuel consumption by an average of 2%.
Take Your Foot off the Pedal
Simply driving a little more efficiently can add up to 25 more miles per gallon of fuel! If your tank holds 13 gallons, that is possibly upwards of an extra 250 miles per tank. Anticipate traffic flows, look further ahead than you normally would, and knock some speed off your clock. Posted speeds are maximum limits, not targets.
Consider a Cash Back Credit Card
Citi offer a Shell-branded MasterCard that pays 1.5% back on the price of your petrol if you fill up in a Shell garage. This used to be 3% and much more worthwhile, but you may now find simply shopping around saves you more over the long term.
AMEX offer a Platinum Cashback credit card with a whopping 5% introductory cashback rate, but this also drops to between 0.75% and 1.5% over the long term.
Finally Egg Money offers 1% cashback but unless you spend considerably on it throughout the year, the £12 annual fee will eat into any cashback you earn, making the card uneconomical for anyone but the higher spenders.
If you choose to go for a cashback card, remember to pay off the balance in full every month. The APR of these cards will stunningly dwarf any return you could have expected from the cashback.
Keep it Serviced
A well looked after engine, is a happy fuel efficient engine. Change the oil regularly, change the oil and fuel filters and clean or replace the air filter regularly and in any case within the servicing schedule of the manufacturers handbook. Always look online for promos or specials on auto maintenance.
Keep Them Inflated
A tyre just a few PSI short of its target starts to lose efficiency. A 5 PSI drop can see the drag increase by as much as 4%, and this increases the work your engine has to do to keep you rolling. It will also start to damage the tyre and cause uneven wear, making it unsafe over the long term and also speed up the replacement schedule biting your wallet.
Turn The Air Conditioning Off
AirCon increases your petrol consumption by as much as 10 per cent – so if it is only a little warm, put the fan on or wind down your window. That said, if you are travelling over 60mph then having the window down increases drag which increases your fuel consumption – so air conditioning would be better. Better yet, keep below 60mph and keep the window open!
Other Cost-Saving Ideas
Wash At Home
Taking your vehicle through the car wash may save time, but at £5 a go for a decent one, it is not cheap. It will also likely start damaging or scratching your paintwork, only do half a job on your alloys and cover your windscreen in wax. For the sake of an hour on a weekend, it is far cheaper to do it yourself. Even if you want to buy brand-name goods to do it with, it will work out considerably less than £5 per wash. If you are content with a bucket of soapy water then you may as well put the whole £5 back in your pocket.
Avoid Dealer Servicing
If your vehicle is outside of its warranty period, avoid the dealership like the plague. An independent garage will likely do the same or better work for half the price. Case in point: My Ford dealership charges £125 for an oil and filter change. KwikFit do the same for £25, and my local garage charges £19.50. All use the same parts and oil, and the cheapest one also had me back on the road in the shortest amount of time.
If it has come the time to replace your old banger with something a bit more modern, consider going smaller. A smaller vehicle will be more efficient, generally cost less to insure, and cost less time to wash as well.
Avoid Financing A New Car
Aside from the fact brand new cars lose value the moment you drive them off the forecourt (as much as 20% in some cases), if you have bought it on finance you could be making it much more expensive in the long run. See my own story on doing this, as it effectively doubled the cost of my car over the 6 years.
And the Biggest Saving?
Use your car less. This does not mean don’t use it where doing so would be useful, but if you can, combine your journeys into one and spend a moment planning out the most efficient route to do everything you need to do without driving along the same bit of road three or four times.
If you are just “popping down the shop” and the weather is pleasant, grab your bike or take a walk instead. Short journeys are arguably the most fuel-expensive, and if you can cut them out you will be well on your way to cutting your annual vehicle costs.
Anything I missed? Come help out in the comments. 🙂
Tags: car wash, Cashback, Cashback website, finance, Insurance, insurance claims, Martin Lewis, MPG, Vehicle insurance
Category Frugal Friday, Motoring
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