How to put the brakes on the rising cost of driving a car

It pays to do your sums before junking your old car for a cheaper-to-run model, as Miles Brignall reports

If you go down to the garage today, you could be in for a nasty surprise. Recent fuel price increases have sent motoring costs rising at their fastest pace since 2000. For many, the old Lada joke about doubling its value by filling it up with petrol is starting to sound horribly true.

Last week, data from the government's Office for National Statistics found that the cost of running a car - filling up with fuel, insuring and maintaining it - rose by 3.5% between October 2006 and last month.

During that period, fuel prices rose to an average of 97.2p a litre in October 2007, compared to 85.9p 12 months earlier, while vehicle excise duty and insurance rose by an average of 6.1%.

As costs have carried on rising what can you do before they get out of hand?

New Car? On the face of it the most obvious solution is to trade in your old gas-guzzler for a super-efficient small car. A new road tax regime, coupled with changes to London's congestion charge, mean there are now some pretty compelling reasons to think small - whether you live in the capital or elsewhere. The stats tell their own story. One of the cheapest and smallest cars - the three-door Citroen C1 - can be bought new for around £5,500 from a broker ( ). It should easily do around 50-60 miles per gallon, and costs just £35 a year to tax due to its very low CO2 emissions. It is group one for insurance, easy to park and, according to its owners, fun to drive.

Someone doing 10,000 miles a year and switching out of a car that does 30 miles per gallon, would save £600-£700 a year through lower fuel bills. Add in cheaper road tax (a typical saving of £155), lower annual insurance, and you could almost £1,000 a year.

A new 1.3 diesel Fiat Panda costs just £6,500 and will do close to 70 miles per gallon - again, you pay £35 a year in road tax.

Even if you need something bigger, there will almost certainly be a more efficient alternative to your current car that is not only good for the environment but also your wallet.

One word of caution before you race down to the dealer. Changing cars is an expensive business as most drivers still lose more each year in depreciation than they spend on fuel. The newer the car, and the higher the price, the more it will depreciate in both percentage and real terms. Remember, with a new car, you face any repair bills.

Buyers need to do the sums carefully before dumping their reliable old banger, as there's clearly little to be gained (financially at least) by cutting your fuel bill by £500 but upping your losses to depreciation by more than £1,000 a year.

Petrol vs diesel: If you need to run a bigger car, the next obvious ploy is to go for a diesel.

In the past, most experts agreed that you had to be covering around 18,000 miles a year to make the outlay worthwhile. However the price premium for a new diesel car has been reduced to the extent there is just a few hundred pounds difference.

The recently launched Kia Cee'd estate is offered in both petrol and diesel at the same price for a limited period - and then at a £750 price difference.

In fuel terms, most diesel cars deliver close to 50 miles per gallon - more for smaller cars. For example, the difference in fuel consumption between the 1.8 litre petrol Toyota Avensis and the diesel model is almost 10 miles per gallon, giving a 12,000-mile-a-year driver a £300-a-year saving. Diesel cars generally pay less road tax each year, as they emit less CO2.

For used car buyers, it is a little more complicated. Used diesels tend to cost considerably more to buy than their petrol equivalents - typically £1,500 for a three-year Avensis.

For the most part, a three-year-old diesel should be reliable, but they are also prone to expensive failures - and when they go wrong, the repair bills can be in excess of £1,500. For that reason alone, those paying for their own cars are probably better off sticking to used petrols, unless they drive more than 14,000 miles a year.

Same car, different driving? According to the AA, you can reduce your fuel bills without swapping your car at all. It says that by driving on the motorway at 70mph rather than 85mph, you will save at least 25p every 10 miles - or £300 a year over 12,000 miles.

Meanwhile, the Guardian's motoring correspondent Giles Smith was told last week that he could expect a 15%-20% cut in fuel bills if he adopted the best driving habits. The advice included fewer but quicker changes of gear - at 2,500 revs - smoother driving by anticipating junctions, and less time spent idling the engine.

Keeping the fuel level half full, rather than filling the tank, and clearing out the boot of unnecessary items will help reduce the weight - and improve fuel consumption.

What you can save by clubbing it

If your car spends more time sitting outside your house than being driven, it could be time to switch to a car club.

Members hire locally-parked cars for a smallish hourly fee. The clubs operate in 37 towns and cities.

Around 30,000 motorists are already members - up from 11,000 a year ago. Many have been tempted by annual savings of up to £2,000 by shedding all the standing costs of car ownership.

The majority of clubs are run by one of four companies, but there are a growing number of smaller operators.

Around 1,200 cars are on offer, and some clubs offer estates, hybrids and vans alongside the usual VW Golfs and Polos. While the charges vary slightly, they all work in a broadly similar way. Members who need a car for a few hours (or days) log on to a website or phone to book one.


In most cases, users get 30 free miles a day, included in the hourly charge which is typically £5. After that, you pay an additional 17p-20p per mile. Day hires typically £35.

At the end of your rental period, you simply return the car to its designated parking space, lock it and leave it for the next person. If you are late, you can face fines. Petrol, insurance, cleaning, servicing and car tax are all paid by the operating firm. Many parking bays are provided by local councils keen to encourage a service with environmental and other benefits. At the end of each month, users are sent a bill which is debited to a credit or bank card.

With 20,000 members, Streetcar is the biggest. It only operates in London, Brighton, Maidstone, Guildford, Cambridge and Southampton. Membership used to be free but now costs £49.50 a year. Rival City Car Club has a lifetime membership fee of £75.

For more information, go to,, and

There are also a number of not-for-profit clubs. For a list of these and more information, go to