Six ways to put the brakes on car costs

Drivers will now have to pay 2p more for each litre of fuel they buy, after yet another petrol price hike came into effect this month. If you're worried about rising car costs, here are six simple ways you can save money on your motor…

With the recession still biting and the cost of car insurance soaring, the last thing any motorist wants to hear is that the cost of fuel has increased once again.

However, as outlined in the Budget back in April, the government has now hiked up the price of petrol and diesel by 2.3p a litre (including VAT). This is the third consecutive price increase in nine months, bringing the average price of a litre of petrol to a whopping £1.07.

In this article, I'll explain six steps you can take to help drive down your car costs and protect your pocket from the extra expense.

1. Leave your wheels at home

The easiest way to slash your fuel bill is to drive less.

Before you hop behind the wheel for those shorter journeys, ask yourself: do you really need to use your car, or could you walk or use public transport instead?

If you drive to work, see if you can set up a carpool with colleagues who also live in your area.

Not only will using your car less you save a pretty penny on petrol, you'll be doing your bit for the environment too.

Furthermore, committing to a lower annual mileage could also help reduce the price you pay for your next car insurance premium.

2. Top up your tank for less

Despite escalating petrol prices, there are things you can do to help reduce your fuel bill.

If you sign up to Petrolprices.com, this free website will help you scour the web and for the cheapest fuel in your area. Simply enter your postcode, specify how far you're willing to travel to buy fuel and you'll be able to compare the price of petrol and diesel at almost 10,000 petrol stations across the country.

It's also a good idea to keep an eye out for cheap petrol promotions. For example, both Tesco and Sainsbury's are currently offering shoppers 5p off each litre of fuel they buy when they spend £50 in store.

Remember, even if you only save a few pence each time you fill up, small savings soon add up!

3. Make your fuel go further

By taking simple steps to improve your car's fuel efficiency, you could shave a tidy sum off your petrol costs.

Make sure you avoid carrying any extra weight in your vehicle. You can help lighten the load by taking off your roof rack when it's not in use, and removing any clutter from your boot.

The way you drive can also have a dramatic effect on how many gallons your car gobbles. According to the RAC, by avoiding sharp breaking and accelerating you could save up to 30% on fuel costs.

In addition, always ensure your tyres are pumped up to the correct level and remember to drive in the right gear. Both measures will help you avoid wasting fuel.

4. Earn cashback when you fill up

Using a cashback credit card to pay for every day expenses such as petrol could help you earn hundreds of pounds in cashback each year, provided you handle your plastic with care and repay your balance in full each month.

Right now, my top pick is the American Express Platinum Credit Card.

As a new cardholder, you will earn a whopping 5% cashback on spending up to £2,000 during the first three months and up to 1.5% cashback thereafter, depending on your annual spend.

However, the American Express Credit Card does come with strict terms and conditions that could lose you your cashback benefits or even cost you money if not adhered to. Therefore, it's crucial you read the small print carefully before you sign on the dotted line.

You can find out more about cashback credit cards by reading Laura Starkey's useful article 'Make free money with this clever credit card'.

5. Drive safely

To help keep car costs down, it's crucial you drive carefully.

If you have an accident and need to claim on your insurance, not only will you have to fork out for your voluntary excess payment; it's also likely your insurer will hike up the price of your car insurance premiums.

Likewise, if you're convicted of a driving offence such as speeding or drink driving, you will probably receive a hefty fine, have penalty points added to your license and may face increased car insurance premiums.

This is because if you have a criminal record or have been involved in an accident within the past few years, your insurance company will view you as a higher risk and consider you more likely to claim on your insurance in the future.

Remember: if you are convicted of a driving offence you are required by law to inform your insurer. Failing to do so could be classed as fraud and may invalidate your policy.

6. Shop around for cheaper car insurance

Finally, it's vital that you don't pay over the odds for your car insurance.

Insurance companies usually save their most competitive prices for new customers. Therefore, never blithely accept a renewal quote without shopping around first.

Using an online comparison service such as BeatThatQuote.com's insurance tool is one of quickest and easiest ways to compare a range of quotes and dig out the best deal.

Be aware that many insurers will charge you more to pay for your annual insurance premium by a monthly direct debit.

If you can't afford to shell out the entire sum up front, a credit card with 0% purchasing power could help you spread the cost of your premium over a longer period of time - and at no extra cost.

You can find more about how a 0% purchases card works by reading my article 'The cheapest way to borrow now.'