Cheap Petrol & Diesel Cut your fuel spend by a third

It's possible to cut your annual petrol/diesel bill by a third, saving £100s. Yet most fuel costs go in tax as a deliberate result of Government environmental and anti-congestion policies, so it takes more than finding the cheapest forecourt.

It's about pain-free, speedy ways to make your car and driving more efficient, and making sure you pay the right way.

Of course, the trite answer to cutting petrol bills is to use your car less, walk more or take public transport, and of course that benefits the environment too. Yet even if you need to do the same mileage, you can hugely slash your costs and get there at the same time.

Step 1: Make your car more efficient

You could see big improvements by making minor tweaks to your vehicle. Thanks to the RAC for help with the efficiency improvement data.

Keep your tyres inflated. Efficiency Improvement: Up to 3% Lower tyre pressure increases the drag on a car meaning you need more fuel, so regularly check the pressures are correct and your car needs less oomph to keep it moving.

Declutter your car. Efficiency Improvement: Up to 2% The lighter your car is, the less effort it needs to accelerate. Therefore, by decluttering, clearing out junk from the boot, and not carrying unnecessary weight, you can make extra savings.

Take your roof rack off. Efficiency Improvement: Up to 2% A roof rack, even unused, adds massive wind resistance to a car, increasing drag and making the engine work harder. So if you don't need it, take it and anything else that's inefficient off. Even closing the windows'll make the car run slightly more efficiently.

Turn off air con at lower speeds. Efficiency Improvement: Up to 8% Air conditioning uses an incredible amount of fuel, so make sure it's turned off unless you really need it. The general consensus is it's more efficient to drive with the windows down and the air con off at lower speeds, but at higher speeds it's better to use the air con and keep windows up due to the extra drag caused by having windows down. If you're not using your air con, it's worth turning it on once in a while as not using it can mean it stops working. Also, don't keep the engine running; drive off as soon as you start up and switch off the engine as soon as you reach your destination.

Don't fill it up. Efficiency Improvement: Up to 1% Fuel is heavy, so by filling the car up you're adding quite a weight. The less fuel your car has in it, the more efficiently it drives. Thus filling up slightly more often and putting less in (to 1/2 or 3/4 full) will make the car run more efficiently.

Step 2: Drive more efficiently

It's possible to drive the same distance in the same time, yet use considerably less fuel, to chop up to 30% OFF your fuel costs without cutting your top speed. It's simply about driving more smoothly to boost your fuel efficiency.

Accelerate gradually without over-revving. Speed up smoothly; when you press harder on the pedal more fuel flows, but you could get to the same speed using much less power – a good rule is to stay under 3,000 revs.

Drive in the correct gear. Always drive in the highest gear possible without labouring the engine.

Slow naturally. Rather than brake all the time, let your car slow naturally and use its stored momentum.

Think about road position. To do all this takes road awareness, so the more alert you are, the better you can plan ahead and move gradually.

In many ways this all comes down to one little rule of thumb ...

Every time you put your foot on the accelerator, remember the harder you press, the more fuel you spend.

Just being conscious of this, and your road position, should massively increase how far you can drive on a tank of petrol. It's estimated someone who averages 35 miles per gallon, or mpg (in old money) could reach 40 mpg by driving better, a near 15% saving.

For someone spending roughly £50 a week on fuel, an equivalent 20% efficiency increase would save around £500 a year. And, according to the RAC, boy racers could expect annual efficient driving gains of up to 30 per cent!

For more info on this read Martin's Petrol Efficiency Experiment Blog. If you try this type of driving or want to share your experiences go to the Driving Efficiently discussion.

Step 3: Find the cheapest Petrol or Diesel

The easiest way to find the cheapest forecourt in your area for petrol, diesel and LPG (and more) is by using the free website PetrolPrices.

After registering, enter your postcode and tell it how far you're willing to travel (2, 5, 10 or 20 miles) and it'll list today's cheapest petrol stations in your area for unleaded, diesel, LPG and other fuels. A quick check before you need to fill up should be enough to save you serious cash.

In January 2012, for a sample postcode the average unleaded price was 136p/litre, the highest price was 138p and the cheapest price 133p.

This type of variance is typical regardless of the actual numbers.

While the difference is only pennies, in percentage terms that means about 5% cost cutting could be possible, so for someone who fills up £50 a week it's a reduction of about £100 a year.

We've worked with PetrolPrices to build a quick tool to show you the target cheapest price you should be aiming for. Then to find the specific prices it shows, you'll need to sign up, for free, via its site.

Find your target price

The easiest way to cut the price you pay is to use this quick tool to find the target cheapest price you should be paying in your local area. Just enter your postcode and click submit.

Grab supermarket petrol promotions

Supermarkets commonly run petrol promotions, and as they're usually cheap for fuel anyway, utilising these schemes means you can save. Usually these take the form of "spend £50 and get a 5p off/litre voucher" deals. The best of these promotions are always included in the free weekly MoneySaving e-mail.

Current Offers:

• Tesco 10p/litre off fuel with £60 spend

  Get a voucher for 10p/litre off petrol, diesel or LPG when you spend £60 on groceries in Tesco stores or online, redeemable at its forecourts. Vouchers will be given out until Sun 5 Feb, and are valid for two weeks from date of issue. If you're spending over £120, split it into £60 transactions to get more vouchers.
  
  Valid at participating stores & fuel stations, excludes Express and ROI. Full terms on the Tesco* website.

Use loyalty schemes

Buying petrol is a regular outlay, and you spend more on it in a year than you think (eg, £30 a week is £1,500 a year!) As many petrol stations (including the supermarket ones) run some form of loyalty scheme, it's worth signing up to schemes for the forecourts you'll use most regularly to get a little bit extra back.

However, never choose a petrol station just for its loyalty scheme, as the difference is small compared to petrol price variance (also see the Increase Your Loyalty Stash guide)

Other filling up tips

There are other ways to cut the cost too:

Always fill up at least fifty miles before your tank's dry. This way there's no panic and you've enough time to get to a cheaper petrol station. Leave it longer and you'll fill up at 'the next one I see', and that means you're not focused on the fuel price. Of course this is slightly offset by the fact that a lighter car uses less fuel, but with 50 miles of fuel left, the difference is minuscule.

Only use 'better fuel' if your car can cope. Many petrol stations sell 'high performance fuels', yet there's little or no performance difference for most non-performance cars - so only fill up with the super-fuels if you've a sports car that you've been specifically advised will actually utilise the petrol correctly. The AA's told us that for most, high performance fuels are too pricey for regular use. But if you're keen, it suggests using three tankfuls in a row to keep the engine clean and efficient, then revert to normal fuel.

Fill up at night..? Talk of filling up at night getting you more is a slight urban myth, as the differences are miniscule, pennies at best. Petrol pumps are calibrated by volume, so fill up at night when it's cold and you get a tiny tiny extra bit.

Don't try to put more in after the clunk. While filling up to full isn't great as it adds weight to the car (see make your car more efficient above), if you must, don't keep going after the petrol nozzle 'clunks', because you're overfilling.

Step 4: Use a cashback credit card

Cashback credit cards pay you back each time you spend on the card. Traditionally these tended to pay the same rate of cashback whatever you bought, but increasing fuel prices have coincided with a new trend for cards to pay especially high cashback when you fill up your tank

They are a great way to shave down the cost of fuel, but ALWAYS abide by...

Set up a direct debit to repay the card in full each month, so you never pay interest, which would outstrip any gain.

The reason card companies offer cashback or reward schemes is simple; they want to encourage you to spend on the card and pay them interest. The interest cost of all cashback cards dwarves the cashback you'll earn. For full details on things to consider before applying, see Top Cashback Cards.

Each time you apply for one of these cards, you'll be credit checked by the lenders - multiple applications in a short period can impact your future ability to get credit. Read full details in the Credit Rating guide.

The easy way to pay off in full.

It's easy to do this via a Direct Debit, which allows the card company to take a variable monthly amount to correspond with what you owe it. Sadly some providers deliberately omit the 'pay off in full' option from Direct Debit forms, as it makes them less money. If so, just write in 'pay off in full'. They should honour it, but call up after a week or so and check it's worked.

The top petrol cashback cards

These are the most lucrative cashback cards for big petrol spenders - have a look through them all and pick the best for you. Also, check out the top overall picks in the Top Cashback Cards guide - as they may be suitable if you spend big in other areas.

For full details on all cards & how these compare,
see Top Cashback Cards

It's also worth noting that if you got the Asda credit card between July '06 and October '08, you get 1p per litre discount on petrol bought at Asda - so if you got one at that time it's worth keeping hold of it.

Step 5: Share driving!

An easy way to cut petrol costs is to drive less! One option is to share lifts to work with friends. There are a few sites that connect people doing the same journey.

• Liftshare. Register your details on Liftshare (it says it doesn't use these for marketing purposes) and enter the journey you'd like to share.
  
  Then check its map for matching commuters, plus you can opt for weekly or monthly emails alerting you to new matches. The site's been going since 1998 and has over 400,000 people registered so in cities there's a fairly good chance of getting a match. Liftshare reckons an every day commuter sharing a journey can save around £800/year.
• Carpooling. Website Carpooling (formerly Rideshare) lets you see possible matches before registering, then lets you register to get in touch if you find a match.
  
  It has over 3.5 million registered users across Europe, not just the UK, and is better for longer trips. For extra safety, it also allows you to only travel with 'authenticated' users who have proven their ID.

Anything to watch for?

Be safe.

Both sites store details securely but when it comes to travelling it's important to be vigilant. Arrange to meet for the first time in a public place, let friends/relatives know what you're doing and check their ID to ensure they are who they say they are.

Taking passengers shouldn't affect insurance.

If you're giving a lift to someone and asking for a contribution towards petrol costs, the Association of British Insurers says, provided there's no element of profit then your car insurance is unlikely to be affected.

However to be completely sure, check with your provider first. Liftshare has a good template letter you can use.

Successes by following the 5-step system

How much can you save?

The savings from following the four-step system can be huge. For someone who drives 15,000 miles a year averaging 35 miles per gallon (12.4 km/litre), just buying petrol at the average UK cost is £2,607. By following all four steps the reduction could be over 20%, cutting the bill by £564 a year.

To work out the initial approximate cost of running your car, Directgov has a fuel consumption search tool (it's best for new cars) which will help you to work out roughly how much it'll cost you to run your car.

Fuel Cost Cutting (as at January 2012)

Annual mileage	Average annual cost (1)	Increase efficiency by 5%	Increase efficiency by 20%	Plus reduce fuel cost by 5% (2)	Plus get 1% cashback	Total saving
5,000 miles	£869	£828	£724	£688	£681	£188
15,000 miles	£2,607	£2,483	£2,173	£2,064	£2,043	£564
30,000 miles	£5,215	£4,966	£4,345	£4,128	£4,087	£1,128
(1) Cost at 35 miles per gallon (12.4 km/litre) at 134p/litre. (2) After increasing efficiency by 20%, fuel cost reduced to 127p/litre.