Running a car

Apply for vehicle tax exemptions and reductions

You may be eligible for a vehicle tax exemption or reduction if you receive one of the following:

• Higher rate mobility component of Disability Living Allowance (DLA)
• Enhanced rate mobility component of Personal Independence Payment (PIP)
• Enhanced rate mobility component of Adult Disability Payment (ADP)
• Higher rate mobility component of Child Disability Payment
• War Pensioners’ Mobility Supplement
• Armed Forces Independence Payment

You can also get a 50% reduction in vehicle tax if you get the PIP standard rate mobility component or the ADP standard rate mobility component.

Saving on fuel

Petrol vs diesel

While diesel cards typically cost more to fuel per litre, they tend to be more fuel-efficient, providing more miles per gallon. If you drive a lot, diesel may save you money over time, but if your mileage is low, petrol may be the better option.

Loyalty cards

Almost every petrol station has its own loyalty card or mobile app, which allows customers to earn money when they fill up.

• With the Tesco Clubcard scheme, you can earn one point for every £2 spent on Tesco fuel.
• With Nectar cards, you get one point on every litre of fuel at Sainsbury’s filling stations.

Where you fill up your fuel matters

• Petrol is mostly cheaper in towns and cities than in rural locations.
• Supermarkets are often cheaper than oil company-owned stations.
• Petrol stations on or close to major roads are also usually more expensive.

PetrolPrices.com will help you find the cheapest petrol or diesel in your area.

Claim mileage back

If you use your car for work purposes, you may be eligible to claim back your mileage. HMRC provides approved mileage rates, which can help you recoup some of your fuel costs.

How much your employer will give you for using your own car for company business depends on your employer and is a matter for negotiation as circumstances vary.

If your employer offers to cover your mileage costs, take advantage of that option.

Reduce your car costs in the long run

Car insurance

• Shop around – Compare quotes from different providers and check if you’re eligible for any discounts (e.g. no-claims bonuses or low-mileage discounts).
• Don’t let your insurance policy auto-renew – Make sure you set a reminder a few weeks before your policy is due for renewal so you have time to shop around for the best deal.
• Consider the type of coverage you need – If you have an older car, you may not need comprehensive insurance and can save by opting for third-party fire and theft coverage instead.
• Reduce your mileage – Lower your annual mileage when renewing insurance to reduce premiums.
• Pay in full – Paying for insurance in a lump sum is typically cheaper than paying monthly.
• No-claims bonus – Build up your no-claims discount to lower premiums.
• Be careful with add-ons – Don’t pay for unnecessary extras like windscreen or personal accident cover. These can often be purchased separately at a lower cost.
• Park smart – If possible, park your car in a garage or on a driveway to reduce insurance premiums and minimise the risk of damage.
• Consider vehicle type – Small-engine cars are usually cheaper to insure and tax.
• Avoid modifications – Car modifications can increase insurance costs significantly.
• Watch out for administration fees – Look out for hidden charges in your car insurance policy.
• Improve your car’s security – Installing an alarm may help reduce your insurance premiums.

Car maintenance and efficiency

• Keep your car well-maintained with regular oil changes, tyre checks and timely servicing to prevent costly repairs.
• Drive efficiently – avoid aggressive driving and keep speeds steady to improve the efficiency of your fuel.

Other tips to help you save money on your car costs

• Consider carpooling – Share rides with other people to split fuel costs and reduce the wear and tear to your vehicle.
• Avoid unnecessary short trips – Short trips can use more fuel, so try to consolidate errands into fewer trips.