Beat the fuel duty hike
Fuel duty increases by 2p today, adding an average of £1.16 on to the cost of a tank of petrol.
Drivers have already suffered a 2p increase in fuel duty in December last year and, most recently, on 1 April. This is despite Gordon Brown promising not to raise fuel duty for 12 months back in July 2008.
The latest increase in duty, which came into effect on 1 September, will cost every motorist an extra £29 over the next year, according to uSwitch.com. In total this will cost drivers more than £36 million, and represents a 25% increase in the cost of filling up a car's tank since 2007.
Alongside fuel duty hikes, the turbulent cost of crude oil has seen drivers forced to pay out more for fuel. According to the AA, the cost of petrol is on the up, rising by 1.5p between July and August to 104.4p per litre. Diesel, meanwhile, has gone up 0.9p per litre to almost 105p.
The AA blames the price rises on “considerable oil price volatility”; it reports that in the past month, crude prices have pitched from $75 to $70 a barrel and back up again to $74.
There are also concerns that petrol prices will increase again when VAT returns to 17% on 1 January.
Steve Chelton, development manager at car insurance provider Swinton, says: “Motorists have seen petrol prices escalate since the start of 2009 and although diesel costs have risen at a slower rate, prices for both will jump due to the latest fuel duty hike.”
With many drivers in no position to absorb the spiralling cost of petrol, many are looking to downsize to a more fuel-efficient vehicle, says Mark Monteiro, insurance expert at uSwitch.com.
"Flash Harrys are becoming well and truly flushed, with more and more motorists prioritising fuel efficiency over ‘forecourt flashiness' by downsizing sizing their cars to pre-empt the increasing expense of filling up the tank,” he explains.
A survey by uSwitch.com found that 33% of drivers are now planning to ditch their gas guzzlers in favour of more fuel efficient vehicles. A third of car buyers also believe that fuel efficiency is a key consideration when buying a new vehicle.
Monteiro says: “Getting from A to B is more about ‘miles per gallon’ than ever before, and, with further petrol price increases in the offing, drivers are right to think about the total running costs of a vehicle before making a final decision on the forecourt."
Beat the fuel duty hike
The most effective way to reduce your motoring costs is to reduce the amount of fuel you use. There are a number of ways to do this.
Reducing the weight of your car will mean it burns less fuel. This means ditching roof racks when not in use and emptying the boot of any heavy items you don't need. Keeping your tyres properly inflated will also increase your fuel-efficiency as will driving in the correct gear and avoiding heavy braking.
Sticking to the speed limit is not only a legal requirement, it is also a good way to reduce your fuel consumption. According to The Slower Speeds Initiative, driving at 50 mph instead of 70 mph can cut your fuel bill by 30%.
If you’re buying a car, it makes economic sense to choose a more environmentally friendly one. According to the RAC, if you buy a £10,000 car, you could save around £12 a week with a more fuel-efficient model.
Your road tax will also be cheaper. New vehicle excise duty (VED) bands target the bigger polluters and car owners in the top tier (band M) will have to pay a £440 charge for cars that emit more than 225g of carbon dioxide per km. Bear in mind that diesel cars are more expensive to tax, because they produce more toxic emissions.
When looking for a new fuel-efficient car, remember that size does matter. Don’t opt for a people carrier if you only expect to ever carry one passenger at a time. Equally, look at the weight of the car as this is more important than engine size when it comes to how much fuel it uses, according to the AA. The heavier it is, the more gas it will burn through.
Other points to bear in mind when shopping for a fuel-efficient car include the fact that manual cars tend to use less fuel than automatics and two-wheel drives are generally more fuel-efficient than four-wheel drives.
Finally, if you don't need to drive then leave your car at home; it's likely to be cheaper (and better for the environment) if you walk, cycle or take public transport instead. Alternatively, you could look into joining or starting a lift-sharing scheme at your work or even joining a car club.
Invented by a Frenchman in 1954 and ironically introduced in the UK on 1 April 1973, VAT is an indirect tax levied on the value added in the production of goods and services, from primary production to final consumption and is paid by the buyer. Its levying is complex, with a number of exemptions and exclusions. For example, in the UK, VAT is payable on chocolate-covered biscuits, but not on chocolate-covered cakes and the non-VAT status of McVitie’s Jaffa Cakes was challenged in a UK court case to determine whether Jaffa Cake was a cake or a biscuit. The judge ruled that the Jaffa Cake is a cake, McVitie’s won the case and VAT is not paid on Jaffa Cakes in the UK.