With the rising cost of living reaching a 40-year high in the UK, many people will be looking at ways to cut costs and adjust their monthly expenses. According to the ONS, 87% of adults reported an increase in their general cost of living and we’re seeing the impact of this on our shopping bills, fuel prices and energy consumption.
When it comes to saving money with your vehicle, it can be tempting to cancel existing policies as a way to see instant savings - but what effect can this have in the long term, and will you possibly end up paying more?
At Vehicle Contracts, we are taking a look at areas where motorists can potentially save cash and those costs that are an absolutely necessary expense.
Cancelling your vehicle breakdown cover can be the obvious choice when it comes to looking at where to save money with motoring costs. Having it in place, however, can save you serious money in the long run as you will be covered for unexpected breakdowns and repairs, and onward travel following a breakdown, which can become very expensive. Whilst it is not mandatory by law to have breakdown cover, it can certainly provide peace of mind, especially if you travel for work or make long-distance journeys regularly.
If you experience a breakdown on the road without cover in place, you can expect to pay an emergency garage call-out fee and an additional fee to have your vehicle towed, which can cost £300 or more on a motorway.
According to MoneySavingExpert, basic cover with the big name brands such as RAC can start at £107 per year for vehicle-only cover without home rescue, and go up to £268 per year for full-service personal cover for you and a partner, whilst roadside assistance cover for a one-off event can start at just £6 per month with the AA. It’s wise to always compare cover options and read the small print of the policy before purchasing, and avoid auto-renewing your policy as other providers may be able to offer a cheaper deal.
Car insurance is required by law. Driving a vehicle without insurance can result in a fixed penalty of £300 and 6 penalty points on your licence, with an added risk of being disqualified from driving. Insurance premiums will vary according to factors such as the number of years you’ve been driving, no claims bonus, the type of vehicle to be insured and the area you live. The type of policy, whether it be Third Party, Third Party Fire & Theft or Comprehensive, will also affect the price you pay yearly or monthly.
We would recommend shopping around on comparison sites to find the best insurance policy suited to your needs, as there is a good chance that those who let their policies auto-renew are not getting the best price. If possible, opt to pay your car insurance premium annually rather than monthly to save up to 20% of the overall cost.
Another motoring expense required by law is car tax or road tax. You are responsible for paying tax on your vehicle if you are using it or keeping it on a public road, and without it, you can be fined £80 by the DVLA. If you are caught by police on the road driving a vehicle without tax, you can receive a fixed penalty notice (FPN) of up to £1,000.
The Government introduced emissions-based taxation which increases in amount depending on emissions produced by the vehicle, with electric vehicles being exempt and hybrid models paying a lower rate. As of April 2017, all new cars are required to pay an annual flat rate for their road tax.
When looking to get a new (secondhand) car, to save money on car tax costs, opt for models known for low to zero road tax costs, such as the Nissan Qashqai, Volkswagen Golf or a Citroën C4 Picasso.
Petrol is due to hit a record high of £2 per litre this summer, with many petrol stations across the country already seeing prices surge to £1.91 per litre. Whilst a necessary expense, you can save fuel by only making essential journeys, carsharing with colleagues to work, researching the cheapest fuel provider in your area, planning direct routes before setting off to avoid traffic hotspots and driving as smoothly as possible. Checking the air pressure in each tyre and getting rid of excess weight in the vehicle can also help towards being as fuel efficient as possible.
Many car insurance policies will offer standard windscreen cover included as an extra in their comprehensive policies which will result in you having to pay the full excess if you experience a windscreen chip or damage. Other policies may not include windscreen cover and require you to purchase separately. Even the tiniest of windscreen chips can cause long-lasting damage and get worse over time, and can even be considered a motoring offence resulting in 3 penalty points and a £50 FPN.
According to AutoGlass, the repair cost of a single windscreen chip or minor crack can cost approximately £167, with a replacement windscreen setting you back between £200 - 250 inc. VAT. Adding windscreen cover to your car insurance policy usually costs around £20-30 per year, resulting in a substantial saving if it is ever required.
Robert Harris, Director at Vehicle Contracts says: “The UK inflation rate is currently affecting our society in various ways, and motorists are facing extraordinary costs when it comes to fuel. However, cutting corners by cancelling policies may appear to be an easy money-saving exercise, but it only takes one thing to happen such as a vehicle breakdown without cover to end up costing a large amount of money, proving it to be a false economy. We recommend revisiting all existing policies, updating information and even switching providers for insurance and breakdown covers to get the best deals possible. As for filling up the car before a commute or trip, always research the cheapest fuel available in your area, even if that means going beyond the closest petrol station.”
