Pump prices have been steadily rising since August, and this month the Petrol Retailers' Association predicted they'd jump by up to 5p by the month-end. Yet it's possible to drive down petrol and diesel costs if you buy in the right place, in the right way.
Of course, the trite answer to cutting fuel 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 use speedy, pain-free tricks to improve your car's fuel efficiency.
In this guide...
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 hugely powerful in the past, seeing people work together to get debt-free, pay off mortgages and more. It's free to join, and open to all - see the Petrol Diet 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. On average, every extra 50kg you ride around with ups your petrol by 2% - and this could be even more in smaller cars.
Take your roof rack off Fuel efficiency improvement: Up to 10%
A roof rack, even unused, adds wind resistance to a car, increasing drag and making the engine work harder. The RAC estimates a roof rack can affect fuel consumption by a whopping 10%. 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 10%
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. At motorway speeds air con can affect fuel consumption by about 3 to 4%, whereas it can be up to 10% in stop and start traffic.
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: Seven tips to drive more efficiently
You can drive the same distance in the same car, without slowing down, but using far less fuel. This is the biggest single factor effecting your fuel costs, and in some cases people find they save 30% when they change driving habits. The key is to drive smoothly. Here are the seven tips you need to know.
The accelerator is a money pump - 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. Plus, if you think about it, if you accelerate too quickly, chances are you'll then have to brake hard, which isn't exactly efficient.
Change up a gear sooner. Always drive in the highest gear possible without labouring the engine. So change up much earlier than feels natural – it will take some pace out of your acceleration, but as that’s our first tip it isn't a bad thing. If you have a fuel efficiency display, you'll be surprised how immediate an impact this has.
Think about road position. All the other tips require you to be alert and aware of your road position. This helps you plan ahead and move gradually. It also means that more efficient driving is also safer driving.
The brake is a money burner. Where safe, allow yourself to slow naturally. When you press the brake you are effectively converting the energy you've paid to put into the car into heat. Instead if you can slow naturally you’re using all the stored energy most efficiently. Good road positioning is crucial for this.
Listen to the noise of your engine. If you hear sharp acceleration and the screech of the brakes you know you're doing it wrong. Imagine driving from traffic light to traffic light doing that. The person behind who speeds up and slows down more slowly will still be behind you at the next light, they'll just have spent far less getting there.
Keep moving if you can. The most expensive metre you drive is always the first one when you start. It takes huge energy to get a car going. So if you can roll gradually up to a traffic light as it changes from red to green, without stopping, it is more efficient than stopping and restarting
Coasting in neutral may feel cheaper but it's dangerous. While putting the car into neutral and coasting may feel like you're using less fuel, it's dangerous, don't do it. You always need access to the accelerator to avoid unexpected hazards. Plus cars can handle far worse on sharp corners when in neutral.
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...Martin Lewis
MSE founder & chair
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 using a nifty free tool.
Go the website PetrolPrices.com and after registering, enter your postcode and tell it how far you're willing to travel (2, 5, 10, 15 or 20 miles). It'll list today's cheapest petrol stations in your area for unleaded, diesel, LPG and other fuels (prices are updated every weekday around noon). A quick check before you need to fill up should be enough to save you serious cash.
For a central London postcode, the price of unleaded within a five-mile radius in Oct 2016 ranged from 110.9p/litre to a staggering 149.9p/litre. In Manchester unleaded prices ranged from 109.7p/litre to 127.9p/litre. Prices vary between postcodes, and in some areas you'll be able to get it for less.
While the difference for a litre may be pennies, in percentage terms that's a possible gap of 35%. So if you fill up £50 a week, it's a difference of over £890 a year.
How does the cost of fuel break down?
The current fuel duty rate for petrol and diesel is set at 57.95p/L with VAT fixed at 20% of the other costs. Here's a breakdown of where your money goes...
|Fuel Duty||Wholesale price||VAT||Retail margin and delivery|
|57.95p (61%)||32.1p (34%)||19.1p (20%)||5.5p (5.8%)||Note: Based on average UK unleaded price (114.6p/L), data from RAC for Oct 2016. Percentages are of costs minus VAT.|
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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 or you've been specifically advised your car will actually use 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 a high performance fuel every third or fourth tank full 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 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.
This is the most lucrative cashback card for big petrol spenders. 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.
Good for all-round spending: 5% intro cashback + up to 1% 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%.
Need to knows
- The 5% introductory cashback applies to the first £2,000 you spend in three months up to £100.
- Cashback is tiered, so if you spend £0 to £5,000 you get 0.5% cashback. All spending above £5,001 attracts the full 1% cashback.
- You must spend at least £3,000 on the card in a year or you will get NO cashback.
- Make sure you repay IN FULL each month, or you'll pay interest at 22.9%.
- Cashback: 3mths 5% (max £100), up to 1% after
- Max cashback/year: N/A | Paid out: On card anniversary
- Annual fee: N/A | Min income: N/A
- Min spend: £3,000 | Card issuer: Amex
- Rate: 22.9% representative APR (see Official APR Example)
Good for very heavy fuel users
The AA card gives a good amount of cashback on fuel but you need to spend £500 on it every month (which can include fuel) and there's an annual fee so weigh up which is the best card for you.
Up to 4% cashback on fuel + 0.5% on other purchases
The AA FuelSave Credit Card is, as the name suggests, geared towards drivers but also gives a small amount of cashback on other spending too. Given its £42 annual fee (taken in £3.50 monthly payments), you need to figure out whether your normal fuel spending would be enough to cover the cost (there's a handy cashback calculator on the AA site).
The key to this card is you only get 4% cashback on fuel if you spend £500 on it EVERY month (which can include fuel) – if you spend less, the cashback's lowered. Here are some examples of the cashback you could earn if you spent £500/mth on the card:
- £90 on fuel plus £410 other spending – £5.65/mth cashback, so £25.80 per year after the annual fee has been deducted.
- £200 on fuel plus £300 other spending – £9.50/mth cashback, £72 per year after the annual fee has been deducted.
- The 4% fuel cashback applies if you spend more than £500 on other purchases, though you're limited to £150 cashback per year.
- If you spend less than £500/mth the cashback on fuel drops to 2% (still a better rate than most other cards, though it makes it harder to break even on the fee).
- In the first year you also get AA Roadside Assistance breakdown cover (RRP £39) BUT this subscription will auto-renew after 12 months (possibly at a higher price), so diarise when to cancel. Basic cover from other breakdown providers starts from £22/mth so check our Breakdown Guide for more information.
- If you keep the card more than 12 months you get a free MOT (worth a max of £54.85) every year you have the card. (Existing AA members get a free MOT in the first year, instead of breakdown cover.)
- Cashback is paid quarterly.
- Make sure you repay IN FULL each month, or you'll pay interest at 14.9% a year.
- Cashback: Up to 4% on fuel, 0.5% elsewhere
- Max cashback/year: £150 | Paid out: Quarterly
- Annual fee: £42 | Min income: £8,000 household salary (exceptions apply)
- Min spend: N/A | Card issuer: Mastercard
- Rate: 22.4% representative APR (14.9% on purchases, and £42 annual fee, 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 . 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.
Founded in France in 2006, BlaBlaCar came to the UK in 2011 and has 25 million members across 22 countries. It lets you search for potential matches without registering, but you'll need to register for free via Facebook or email if you want 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 £2,231 annually as of Oct 2016. Cutting this spend by 25% could save £558/year.
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 114.6p/litre. Last updated Oct 2016, based on Oct 2016 averages.|
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