Cutting The Running Costs Of Using Your Car

Petrol prices are in the ascendancy and the running costs for a car is still expensive. So how can you cut your car costs

The recent hike in petrol prices throughout 2008 by an estimated 17%, has resulted in most car owners finding it a costly experience running a car.

Put in monetary terms, the estimated running costs of an average car now comes in at £280 more than it did a year ago.

The news is even worse for owners with a new car. According to the RAC's annual Cost of Motoring Index, depreciation on new cars is running at 35% higher than last year. This means that on average, a new car will loose about £3,200 in depreciation each year.

So the question is, how do you keep the running costs of your car as low as possible?

The Right Car Loan

In the first instance, if you are going to use a financial option when buying a car, think carefully about which car you are buying. If the car is new, then there is the inevitable issue of depreciation.

Should you be unlucky enough to purchase a car that notoriously has a higher depreciation rate, then this will add considerably to your running costs. Loosing up £3,500 pounds on the value of your car each year is hard enough, especially when you will also incur the usual running costs such as fuel, road tax and car insurance.

Most people when buying a car on finance, forget to take into account that they may want to part exchange their car in a twelve to twenty four month period - as a good deal of people do. However, if the car was bought new, there is a very good chance that the book price of the car will be considerably lower than the finance taken out. They are then in negative equity with the car.

The solution to reducing the impact of depreciation is to buy a nearly new used car - whare a considerably amount of depreciation will have already taken place. Definately research which cars have the highest rate of depreciation.

Low Emission Cars

From next April, the road tax-bands will change. If your car emits less than 150g's of carbox dioxide per kilometer, then you may well reduce or remain unchanged. 

However, if your car emits more than 255g's of carbon dioxide per kilometer, their road tax bill will reach the heady heights of £440 per year.

From April 2010, there will be a new rate for the first year of owning a car. Cars with high carbon dioxide emissions in excess of 250g's per kilometer, could see their road tax leap to £950. For the least polluting new cars, the first year rate will be zero.

The Impact On The Car Industry

As a result, it is not surprising that the news out of the car manufacturing industry is that new car registrations have plummeted by 23% in October, making it the largest drop in new car sales for 17 years.

However, the current economic uncertainty seems to be favouring car drivers who are looking to buy a cheaper used and nearly used car. When set against the recent news that finance houses such as GMAC have signed a 3 year deal with Manheim auctions to dispose of all of its voluntary terminations, repossessions and PCP contracts, it is an indication that there are now cheaper nearly new used cars available to buy from a number of different sources.

This raises two key questions for car users;

1. How can I buy a cheap nearly new used car?
2. How can I keep the running costs down?

Buying a cheap nearly new used car is becoming more achievable.