The First Step To Making Savings In Your Motoring Costs

is to fully investigate what they are so you know where you can intervene and make improvements. Here are some guidelines:

A small car that cost £10,000 will depreciate by on average over £1,100 every year over 8-years or about £1,500 per year over 4-years. If you buy a larger more expensive car depreciation will increase.

If you pay cash for the car you lose the opportunity to earn interest. If you borrow the money you pay interest. If you borrowed £8,000 it would cost about £650 per year in interest and charges.

What you pay for car insurance depends on you shopping around. Let's say it's £400 per year. Vehicle excise duty is determined by a car's emissions - say £120 for a small car. To fuel a car for 12,000 miles at 40 mpg costs about £1,800. A service will probably cost £150 and replacing parts that inevitably wear out will cost an additional £250 per year. If we add breakdown cover and total it all up it's about £4,700 per year just to run a small car.

Motoring costs are important because that figure is around 20% of the average person's take home pay of £22,000 and could be 25% or more for a larger or more expensive car.

Now you know the costs - when you do this for yourself - the next question is can you intervene and make improvements?

You can't do anything about car depreciation because it's determined by the market. You can lessen the impact by maximizing the discount on the price you pay or buying a second-hand or an older car. You might also try to improve your price when you sell the car.

Shopping around for cheap car insurance is the one area of motoring costs where you can definitely make a saving of hundreds if not over £1,000. Shopping for the cheapest car finance can also save you a huge amount of money.

Vehicle Excise Duty is set in government budgets and is determined and fixed by the car you buy. To a large extent the same applies to fuel consumption. You also need to keep your car in serviceable condition for it to pass an MOT.

You can make improvements in your motoring costs. The type of car you buy will determine most of the costs. It pays to compare new with used cars and petrol with diesel engines without making assumptions. So much of your total cost will also depend on how good a deal you can get on the car and finance.

There are a lot of topics to look into - depreciation, finance, insurance, VED, mpg, parts, new v used, petrol v diesel, negotiating - which I'll return to one-by-one in later posts. When it comes to negotiating I'm your best source of info'. I profitably sold cars for 43-years and have remained involved for a further 3-years to date which I think is a record that can't be physically beaten.

Regards
Ralph
P.S. the easiest way to understand the difference and similarities in cars is to use car comparison websites