Motoring costs have risen by £150 in the past year, so check out these ways to drive down your motoring expenses.
According to a new report from Sainsbury's Bank, the cost of motoring has risen by around a fourteenth (7.2%) in the past twelve months. For the record, here's a breakdown of what a typical driver will spend on motoring this year:
The cost of motoring
Expense | Average outlay |
|---|---|
Fuel | 1,226 |
Insurance (typical premium) | 462 |
Servicing costs | 273 |
Vehicle Excise Duty ("road tax") | 116 |
Roadside assistance (from The AA) | 80 |
MoT | 44 |
Total | 2,201 |
In other words, a typical driver spends around £184 a month on motoring costs, but this omits finance costs for hire-purchase and loan agreements, plus the biggest expense of owning a car: depreciation, which is the tendency for a vehicle's value to fall over time. Last year, the above total came to £2,053, so the cost of motoring has risen by £148 in twelve months, largely because of rising fuel prices.
So, how do you go about cutting the cost of motoring? My simple memory aid will help: CLIO, which stands for Car, Loan, Insurance and Other costs.
Your first step is to haggle or shop around when buying a car, which should secure you a discount of around £1,300+ off the list price of a new car.
Second, steer clear of dealer finance (even 0% finance, which limits your ability to secure a decent discount) and buy using savings, or check out personal loans instead -- these twelve tips will help.
Third, avoid insurance add-ons in the dealership -- especially the dreaded payment protection insurance, extended warranties and GAP insurance -- and shop around for cheaper car insurance (our search engine checks 97% of the online car insurance market to find you the best deal).
Fourth, you need to tackle the remaining expenses, which include fuel and servicing costs and other add-ons. For instance, we spend over £7 billion a year on servicing 26 million cars, but it pays to shop around between garages, because branded dealers often charge twice as much as independent garages for the same work! Also, look into cheaper breakdown insurance: why pay upwards of £80 a year for cover with the AA, Green Flag or the RAC, when Best Buy provider AutoAid charges just £32?
For more tips on driving down your motoring costs, read How To Beat Fuel At £1 A Litre, Ten Routes To Cheaper Motoring and Tremendous Tips For Motorists.
Here's wishing you many miles of trouble-free motoring!
More: Check out these great personal loans, car insurance and savings accounts!
Disclosure: Cliff owns shares in HBOS, which owns 45% of Sainsbury's Bank.