Petrol prices have been falling fast - and are now edging below the £1/litre mark for the first time in five years. But it's still possible to drive down costs further by buying in the right place in the right way. Plus you can cut your annual petrol or diesel bill by up to a third by using speedy, pain-free ways to improve your car's fuel efficiency.
Of course, the trite answer to cutting petrol bills is to use your car less, walk more or take public transport - and all that benefits the environment too. Yet even if you need to do the same mileage, you can slash your costs hugely, and get there at the same time.
MSE Challenge: The petrol diet!
Once you've read the steps below, why not try the petrol diet? No, we don't advocate swigging the stuff - it's a challenge on the MSE Forum, where MoneySavers share tips to help cut their annual fuel spend, track savings, and inspire others.
The forum's proved to be hugely powerful in the past, seeing people work together to get debt-free, pay off mortgages and more. It's free to join in, and open to all - see the Petrol Diet forum discussion.
Step 1: Make your car more fuel-efficient
Keep your tyres inflated Fuel 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 Fuel efficiency improvement: Up to 2%
The lighter your car is, the less effort it needs to accelerate. By decluttering, clearing out junk from the boot, and not carrying unnecessary weight, you can save more.
Take your roof rack off Fuel efficiency improvement: Up to 2%
A roof rack, even unused, adds wind resistance to a car, increasing drag and making the engine work harder. If you don't need it, take it off, along with anything else inefficient. Even closing the windows will make the car run slightly more efficiently.
Turn off air con at lower speeds Fuel efficiency improvement: Up to 8%
Newer cars are getting better on this, but air conditioning still 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. Turn your engine off where possible, eg, in traffic or during big delays on motorways.
Don't fill it up Fuel 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. If you fill up slightly more often and put less in (to 1/2 or 3/4 full), it'll make the car run more efficiently.
Step 2: Drive more efficiently
You can drive the same distance in the same time using much less fuel, chopping up to 30% OFF your fuel costs, but without cutting your top speed. It's about driving more smoothly to boost your fuel efficiency.
Accelerate gradually without over-revving
Speed up smoothly. If you press harder on the pedal, more fuel will flow - but you can reach the same speed using much less power. As a rough rule, stay under 3,000 revs.
Drive in the correct gear
Always drive in the highest gear possible without labouring the engine. So change up much earlier than feels natxural. Again, a very rough guide (though it varies wildly with each car) is not to go over 3,000 revs.
Rather than brake all the time, let your car slow naturally. Use its stored momentum.
Think about road position
To do all this takes road awareness. 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 could reach 40mpg by driving better, a near-15% saving.
The real world impact: Martin's story
On an overseas holiday I got to test this, thanks to a sexy little digital display in my hire car which gave me a km/litre readout. For every trip, I drove normally on the way there and used the "think when pressing the pedal" method above on the way back.
If you're thinking "did he really bother while on holiday?" - yes I did, and I loved it. Luckily my girlfriend (now my wife) is very understanding!
The improvement is enormous!
Overall, I drove about 500 miles, and the different 'efficiency' averages per litre of petrol were incredible: for normal driving, it was 11.2 kilometres per litre, but for efficiency-conscious driving, a remarkable 13.4 kilometres per litre.
Most intriguingly, the efficient driving didn't cost me any time at all, and on motorways my top speed didn't change. Others drove harder, only to brake harder at the next traffic light...
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%!
Step 3: Find the cheapest petrol or diesel prices
The easiest way to find the cheapest forecourt in your area for petrol, diesel, LPG and more, is by comparing prices at free website PetrolPrices.com.
After registering, enter your postcode and tell it how far you're willing to travel (2, 5, 10, 15 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.
|58p (47%)||35p (32%)||20p (17%)||5p (4%)||Note: Based on average UK unleaded price & percentage data from PetrolPrices.com for December 2014. VAT is 20% of all the other costs.|
In Jan 2015, for a sample postcode the average unleaded price was 108p/litre, the highest price was 112p/litre and the cheapest price 106p/litre. This range is typical (though of course prices vary between postcodes too, and in some areas you'll be able to get it for less).
While the difference is only pennies, in percentage terms that means you could save about 5%. So if you fill up £50 a week, it's a reduction of about £130 a year.
We've worked with PetrolPrices.com to build a quick tool to show you the target cheapest price you should be aiming for. To find the specific prices it shows, you'll need to sign up, for free, via its site. PetrolPrices.com has told us prices are updated every weekday around noon, so factor this in.
Find your target fuel price
Use this quick tool to find the target cheapest fuel price you should be paying in your local area. Just enter your postcode and click "submit". If you want to find the cheapest local petrol station, sign up for free at PetrolPrices.com.
We've created a quick tool to find the target cheapest fuel price you should be paying in your local area. Unfortunately, this doesn't work on mobile, just on desktop, so why don't you just email yourself this guide. If you want to find the cheapest local petrol station, sign up for free at PetrolPrices.com
Supermarkets often run petrol promotions. 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 email.
Tesco shopper? Get up to 20p/litre off fuel
If you're a driver who shops at Tesco, its Clubcard Fuel Save* scheme is a must. You get 2p/litre off petrol and diesel at Tesco forecourts for every £50 you spend in-store or on groceries online in any one month.
The real change here from its old voucher giveaway is this deal is running consistently until February next year – though it gives less per £50 than it used to.
How it works:
You needn't spend the £50 in one go. Let’s say you did three separate shopping trips of £30, £60 and £20 in a month. As your total spending is £110 – you get two 2p discounts. The total’s wiped again each calendar month.
Discounts accumulate in any one month. You can't combine the savings you earn in one month with those you earn in another. So, while any savings you made in October could be spent in November, they couldn't be combined with any new savings you earn in November.
You can combine discounts up to a max of 20p/L off per fuel transaction. The discounts build up so if you spend £100, you'll get two 2p discounts which you can combine to get 4p/L off up to a max discount of 20p/L per fill. There's no limit to the total reduction you can get in a given month, but any saving beyond 20p/L would have to take place in a separate fuel transaction. To max it, let the discount rack up, and wait till you have a full tank to fill.
Show your Clubcard. The new scheme works automatically as long as you use a Clubcard. Just present it when you buy your petrol and decide how many of the accrued discounts you want to use. You've until the end of the month to use savings earned the previous month. So 20p off/L earned in December will expire on 31 January.
See a list of exclusions
You can redeem the vouchers at Tesco forecourts, but not Esso forecourts where a Tesco store's attached.
Spending on the following doesn't count: infant milk formula, tobacco products, fuel, prescription medicines, stamps, saving stamps, lottery, cafe, E-Top-up, money, insurance, Tesco gift cards and purchases from in-store concessions, eg, Costa and Giraffe. See full terms.
Morrisons: Free tank of petrol? Big spenders' extreme couponing
This is an awesome bit of extreme couponing but it's fiddly and only works if you're already planning to make a big purchase at certain high street stores, such as Homebase or Currys.
Morrisons' Fuel Saver deal gives 1p/litre off petrol, diesel or LPG for every £10-worth of gift cards bought in-store. Lots of retailers are listed, including Homebase, Debenhams, Currys, Halfords, TK Maxx, Oasis and Waterstones (see the full list), though Morrisons' own gift cards aren't included.
How it works:
- Buy a giftcard in store for at least £10 to get 1p/litre off. Plus you can buy multiple cards and stack the discounts. So, for example, buy five £10 gift cards and you'll get 5p/litre off one fuel spend.
- Planning a big purchase? Buy gift cards first. If there's a large purchase you are going to make anyway - say you're spending £500 on a computer at PC World - get it by first buying the gift cards and you'll bag money off your petrol too (in this example, 50p/litre off).
Gift cards will be activated by Morrisons in-store, but you won't be able to spend them until your chosen retailer has also activated them. This can take up to 72 hours so you may have to wait a few days before spending. (You can often check with retailers whether the card's been fully activated and is ready to use, though this varies by gift card).
Remember gift cards are non-refundable and third party retailers (Morrisons in this case) don't have any responsibility to refund you if a gift card's retailer goes bust. (See the Beware gift vouchers MSE news story). Cards are generally valid for two years, but always check.
How much can you save?
£1,250-worth of gift cards would effectively make a £1.25/litre tank FREE. However in practice, the maximum coupon value you can get for one transaction when buying a gift card is £1 off per litre (which would be issued if you put £1,000 on a gift card).
So if you want to put more than £1,000 on a gift card, do it through a separate transaction and you’ll be able to collect a second coupon. You are able to stack petrol coupons, ie, use more than one at the same time when purchasing fuel.
Petrol vouchers are valid for 63 days from the issue date. Forumite Matthewh notes:
It really depends on if you were going to spend the money anyway! We were going to buy sofas at Next anyway - so I bought enough gift cards in Morrisons to cover the full price of fuel. Then bought the sofa with the gift cards - so I got nearly a £100 discount.- Matthewh
Pay with a credit card for extra protection
If you’re buying a big item, consider paying for part of it with a credit card rather than entirely with the gift vouchers, if you can. This means you’d get Section 75 protection in case something went wrong.
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Use loyalty schemes
Buying petrol is a regular outlay, and you spend more on it in a year than you think - £30 a week is over £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)
There are several other ways to cut the cost of petrol and diesel:
Always fill up at least 50 miles before your tank's dry
Then 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", so you're not focused on the price.
This is slightly offset by the fact that a lighter car uses less fuel. But with 50 miles of fuel left, the difference is tiny.
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 you've been specifically advised will actually usee the petrol correctly.
The AA tells us that for most other cars, 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 minuscule - 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
Filling up to full isn't great as it adds weight to the car (see above for how to make your car more efficient). But if you must, don't keep going after the petrol nozzle 'clunks'. If you do, you're overfilling.
Step 4: Pay using a petrol 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 has worked.
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.
Top for bigger spenders - 3% on fuel/transport, 1% in supermarkets
The Santander 123* card pays 3% cashback on fuel, rail and TfL spending, making it a good card for people who drive a lot of the time. The only drawback to this is that the cashback you get on fuel or travel is limited to £9 a month, so it's not the best card if you spend more than £300 a month on fuel. However, it does also pay (unlimited) cashback on supermarket and department store spending, though watch out for its £24 annual fee.
Need to knows
- Fuel and rail spending gets 3% cashback, up to a maximum of £9/mth.
- You get 2% cashback in department stores, and 1% cashback in supermarkets.
- You get no cashback on spending outside these categories.
- It has a £24 annual fee, but if you’ve got or get the best-buy Santander 123 bank account the fee is refunded in the first year.
- Ensure you repay IN FULL every month or you'll pay 12.7% interest on spending which quickly wipes cashback gains.
- Cashback: 3% on petrol/transport, 2% in dept stores, 1% in supermarkets, NONE elsewhere
- Max cashback limits? £9/mth petrol/transport | Paid out: Monthly
- Annual fee: £24
- Min spend: N/A | Card issuer: Mastercard | Min income: £7,500
- Rate: 16.5% representative APR (incl fee). 12.7% p.a. on spending (see Official APR Example)
Where can I earn cashback? Here are some examples of which retailers qualify for the various cashback - not all branches are eligible, so check your local retailer:
- Fuel and transport - 3%. Includes BP, Shell, Esso, Texaco, Tesco, Asda, Morrisons, Sainsbury's, National Rail and Transport for London (excludes newsagent top-ups).
- Dept stores - 2%. Includes Debenhams, House of Fraser, John Lewis, BHS, Selfridges.
- Supermarkets - 1%. Includes Tesco, Asda, Sainsbury's, Morrisons, Waitrose, M&S.
This is done by the retailer's 'merchant number', so there's a possibility some will be categorised differently to what you'd expect. You've little comeback if they are, but it's worth being aware this could happen.
Good for all-round spending: 5% intro cashback + up to 1.25% after
The American Express Platinum Everyday* is not specifically a petrol cashback card but as all spending's included, it's worth checking out if you fill up often. You get a massive 5% introductory cashback, then it's tiered up to 1.25%. Whether or not this card beats Santander above depends on what other spending you do on the card.
Need to knows
- The 5% introductory cashback lasts either until you've spent £2,000 or for the first three months.
- Cashback is tiered, so if you spend £0 to £3,500 you get 0.5% cashback. From £3,500 to £7,500 you get 1%, and all spending above £7,501 attracts the full 1.25% cashback.
- You must spend at least £3,000 on the card or you will get NO cashback.
- Make sure you repay IN FULL each month, or you'll pay interest at 19.9%.
- Cashback: 3mths 5% (max £100), up to 1.25% after.
- Max cashback/year: N/A | Paid out: On card anniversary
- Annual fee: None | Min income: £20k household salary
- Min spend: £3,000 | Card issuer: Amex
- Rate: 19.9% representative APR (see Official APR Example)
Fee-free 0.5% rewards for AA members
Existing AA Breakdown or Loyalty Club members can apply for the AA Rewards credit card, which gives reward points on petrol/diesel spending. It's a good card for big petrol spenders who are AA members. However, for most, this card's beatable by Santander's 3% (max £9/mth), although irregular drivers will be more harshly impacted by Santander's annual fee.
Need to knows
- AA members get 2 points per £1 spent on fuel and 1 point per £1 spent elsewhere.
- Non-members get 1 point per £1 spent on fuel, and 1 point per £2 spent elsewhere.
- The rewards come as AA points, which can be turned into cashback, gift vouchers or spent on AA products.
- Always repay IN FULL each month or you'll pay 16.9% in interest, wiping cashback gains.
- Cashback: 0.5% fuel, 0.25% elsewhere (AA members); 0.25% fuel, 0.125% elsewhere (non-members)
- Paid out: Rewards points added straight away | Max cashback/year: No limit
- Annual fee: N/A | Min spend: N/A | Min income: N/A | Card issuer: Visa
- Rate: 16.9% rep APR (see Official APR Example)
Step 5: Share the driving to cut your petrol costs
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.
Register your details on Liftshare (it says it never uses these for marketing purposes) and enter the journey you'd like to share. Then check its search results for matching commuters. You can also opt for weekly or monthly emails alerting you to new matches, and it also lets you search for potential matches before registering.
The site's been going since 1998 and Liftshare says it's the largest car-sharing network in the UK. It reckons a daily commuter sharing a journey can save around £1,000/year. You'll also find a nifty savings calculator to help work out how much your journey costs, plus how much you could save by sharing with others.
Website Carpooling (it used to be called Rideshare) lets you see possible matches before registering, then lets you register to get in touch if you find a match.
It has over four million registered users across Europe, not just the UK, and is generally better for longer trips. For extra safety, it also allows you to only travel with 'authenticated' users who have proven their ID, and offers a rating system that lets you read reviews on users you're considering sharing a lift with.
Founded in France in 2006, BlaBlaCar came to the UK in 2011 and has ten million members across Europe. It lets you search for potential matches without registering, but you'll need to register for free via Facebook or email to contact a driver or offer a lift.
The 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 or 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 that provided there's no element of profit, 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.
'Do it - you'll be surprised'
Thanks to driving tips from @MoneySavingExp, I have saved myself £20 in fuel in 1 month, driving more carefully. Do it, you'll be surprised.- MoneySaver @mathewhasker on Twitter
'I doubled my fuel economy!'
Over the last 2 years I have almost doubled my fuel economy, without changing vehicles.
1. I drive much more smoothly and don't overtake other car users just to get one or two places further along in a big queue.
2. I leave for work a little later and return home a little later- as a result I no longer spend 30 mins plus on a 4 mile crawl through stop/start traffic on a 26 mile (each way) commute into and out of Aberdeen.
My blood pressure is also lower!- MoneySaver Caleypine
'20 extra miles per tank!'
Results I've got from trying to drive more fuel-efficiently. Most of this has been city driving:
Previously, 33-35 litres gave me around 215 miles.
Driving more carefully increased this to around 235 miles.
Turning engine off at lights increased my mileage to 293 miles.- MoneySaver Krishna
The savings from following the five-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 price would cost £2,300 annually as of December 2014, according to the Fuel Cost Calculator on PetrolPrices.com. Cutting this spend by 25% could save £580.
To work out the initial approximate cost of running your car, the Gov.uk website has a fuel consumption search tool (it's best for new cars) which will help you work out roughly how much it'll cost you to run your car. Motoring website Honest John also has a handy 'real MPG' section where drivers have reported the miles per gallon they actually get.
|Annual mileage||Average annual cost (1)||Cut fuel costs by 5%||Cut fuel costs by 20%||Cut fuel costs by 25%||Potential saving|
|(1) Cost at 35 miles per gallon (12.4 km/litre) at 118p/litre. Last updated Jan 2015, based on Dec 2014 averages.|
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