Petrol prices UP, car prices UP, car hire costs UP - so we've 11 motoring tips to drive down the accelerating strain on your finances
Anyone who drives will know that costs are speeding into top gear. For example, petrol prices have risen to an eight-year high - up 21p/L from a year ago, average used car prices have jumped by £1,000 versus a year ago, and UK car hire prices are up by 84% compared with last year.
This is on top of the many warnings that car insurance prices could jump later this year. So if you NEED to run or use a vehicle our 50+ motoring MoneySaving tips can help, but here are 11 to avoid getting stuck in a financial snarl up, including cheap fuel finder, 2.8% car loans, how to slash insurance costs and how to beat an MOT test squeeze...
This article was originally written for our weekly email on Wednesday 25 August. We've updated it with all the latest info on Tuesday 31 August.
1. Use a handy tool to beat rising fuel costs by finding the cheapest petrol and diesel near you in seconds.
The AA and RAC tell us petrol prices are at an eight-year high and diesel prices are at a near three-year high. But you can put the brakes on these soaring costs by picking a cheaper filling station - for example, we found that in Durham on Tue prices ranged from 130.8p/L to 142.9p/L. Speedily find the cheapest forecourt near you.
2. Check your car is compatible with the new greener unleaded petrol - that'll be on most forecourts from this week.
Little-known Government rules in England, Scotland and Wales mean forecourts need to sell greener 'E10' petrol as standard by 1 Sept. Yet 600,000 older vehicles aren't compatible and will have to switch to pricier super-grade fuel.
For those whose cars can handle the new petrol, the underlying price is the same, but while it's greener overall, you may need to fill up more often as it's less efficient. See full new greener petrol help, including how to check if your car is affected.
3. Save hundreds if you're buying a car by getting the best finance deal.
It's always been cheaper to buy a used car rather than new, but average used car prices are up by £1,000+ since this time last year, according to many car firms. That's because a shortage of new cars has pushed buyers into the used car market.
So while your new set of wheels may cost more (though always try to haggle), at least make sure you pay the cheapest way. Using savings works out best as there's no interest to pay (and savings rates are so poor anyway). But many can't afford that. So next best option is usually (in order)...
- A 0% spending credit card. If the seller takes credit card, see if you can get a 0% card. Credit limits vary by person, so put as much as you can on card, and if you need more, try these options.
- A personal loan from 2.8%. Rates tend to be lower than those on specialised car finance packages (but you get less flexibility with a loan). See full help and options in Cheap Car Loans.
- Specialised car finance, eg, PCP. These can work well if you're planning to trade up to newer models regularly, you don't want the car for years and years, or you can't get a cheap loan. Yet they also come with pitfalls. See Cheap Personal Contract Purchase and our other car finance guides for pros and cons.
Of course, higher prices are better for sellers, so it's not a one-sided story.
4. Check now if you can save on your car insurance, even if not at renewal - as prices are set to rise.
You can often cut £100s off your car insurance costs simply by comparing prices a few weeks before your renewal is due rather than sticking with the same insurer.
Prices for newbies are at the lowest they've been for seven years, yet we expect them to rise over the next few months, as insurers prepare for a shake-up that means they'll have to offer new and existing customers the same prices from Jan 2022. So now is a sweet spot for EVERYONE to check if they can save - even if not at renewal.
Full info in Cheap Car Insurance, here are the basics:
- Not at renewal? Follow the tips below to check new policy prices. If savings are big, you can cancel your policy, and provided you've not claimed, you'll get a pro-rata refund if you paid upfront, minus a £50ish fee. However, you won't earn the year's no-claims bonus. See switching mid-year help.
- Buy 23 days ahead of the day you need the insurance to start to save £100s. Our research shows average savings of £500 compared with getting it the day before - see why.
- Combine comparison sites to find your cheapest cover. Try a few as they don't cover the same insurers, nor give the same price for the same insurer. Our current order is: 1) Confused.com* 2) MoneySupermarket* 3) Compare The Market* 4) Gocompare*. (Why? See comparison order.)
- Try insurers and hot deals comparisons miss. Check if biggie Direct Line* can beat your top quote, as it isn't listed on comparisons and can be competitive for some. Also see deals comparisons miss, such as a £60 shopping voucher.
- Also use these counter-logical tricks. Use trial and error to see if comprehensive cover beats 3rd party, check if insuring extra, responsible drivers can slash costs, and see if legitimately tweaking your job description can also cut the price.
6. Save up to 30% on fuel - by driving less like Lewis Hamilton.
For example, accelerating gently and slowing gradually (where possible) uses less, as does streamlining your car and turning off the air-conditioning when not needed. See 13 tips to help you guzzle less.
7. Save up to two-thirds on rocketing car hire prices by booking early - plus, don't fall for costly insurance upgrades.
It's not just cars you own that've got more expensive to run, cars you rent are also more expensive - whether to use at home or abroad.
For example, as more people are holidaying here, UK firms have hiked costs due to demand and to try to make up pandemic losses, leading to prices being 84% higher than this time last year, according to car hire excess insurer iCarhireinsurance.com.
Yet you can fight soaring costs here too. Booking early saves up to two-thirds, and buying standalone excess insurance usually costs about £2 a day, compared with up to £25 a day via hire firms. See Cheap Car Hire for more cost-cutting tips.
8. MOT due soon? Arrange a test NOW as there's a backlog and you could be fined £1,000 if you drive without a valid certificate.
The Driver and Vehicle Standards Agency tells us seven million tests are due in Sept and Oct - 1.3 million more than in the same period in 2019, as some were delayed by the pandemic. The AA says test centres are already 'feeling the strain'. And we've tips to find cheaper tests and help you minimise fails in Cheap MOTs.
9. Warning. Some petrol pumps now (temporarily) take £100 off your card, even if you spend less - what you can do.
Garages may authorise this on your card at self-service pumps to check you can afford the fuel, yet some MoneySavers have reported waiting days for the difference between the £100 and what they spent to be returned. Full info, help (especially if it means you can't pay bills as a result) and how to avoid this in Fuel pumps alert.
10. Check you've taxed your motor - if not, you risk a £1,000 fine.
More than 600,000 people are driving untaxed, risking a fine or having their car impounded. See how to check if you've paid vehicle tax.
11. Cut your car costs... by not using a car.
The average length of a car trip is 8.4 miles. Think before you get behind the wheel - could you walk, cycle or get public transport? Check out our 12 MoneySaving tips for cyclists and, while trains can be expensive, we've ways to cut train costs, plus can you find £1-£5 train tickets?