Car costs rising everywhere, but savings are possible for drivers

Car expenses don’t attract attention like mortgages, rents, groceries and electricity, but they are hurting households, and there are ways to lower them.

Petrol prices have been climbing in recent months, and that’s not the only motor vehicle expense hitting the hip pockets of drivers everywhere.

The latest Australian Bureau of Statistics figures show both insurance and motor vehicle spare parts were among the fastest-rising costs in the Consumer Price Index for 2022-23, up 14 per cent and 12 per cent respectively.

Car costs might not have grabbed headlines like mortgages, rents and groceries, but the potential savings can add up to thousands of dollars a year for those who drive their dollars further.

Consider these categories.

FILLING UP

Most major capital cities have fuel price cycles where pump prices can swing 20c-30c a litre during a month. Understand how the price cycle in your city works and fill up at or near the bottom.

The Australian Competition and Consumer Commission publishes fuel price graphs and other information to help motorists get their timing right.

Author and Canstar spokeswoman Effie Zahos recommends taking advantage of loyalty program and shopping discounts, as these can be stacked to multiply savings.

“Both Coles and Woolworths offer a 4c-a-litre discount on fuel if you spend $30 or more on groceries,” she says.

Follow the fuel price cycle and save money. Picture: iStock

Further discounts are available if you spend money on products at the service station.

“Coles Express offers a 10c a litre discount if you spend $20 on eligible products in-store,” Zahos says.

“Obviously, you shouldn’t buy things just for the discount but think about what you may actually need.”

In some cities, toll accounts deliver an extra 4c discount, taking total savings to 18c. Add this to timing the fuel cycle correctly and you’re heading towards being 50c-a-litre better off.

CAR INSURANCE

Set-and-forget car insurance can be among motorists’ biggest money mistakes, because insurers automatically increase premiums annually and often give new customers the best deals. There is no reward for customer loyalty.

Zahos says people who don’t drive much can look into pay-as-you-drive policies.

“You tell the insurer the number of kilometres you estimate you’ll drive in a year and they will calculate your premium based on that,” she says.

“If you end up driving more than you thought, you can let the insurer know and pay to increase the kilometres.”

Compare the Market spokeswoman Noemi Hadnagy says there are several perks and savings available with insurers for those who look for them.

“We don’t want to see people paying more than they need to and these perks can make a world of difference for households doing it tough,” she says.

For example, Woolworths Everyday Rewards offers 10 per cent off groceries once a month with Everyday car insurance, Virgin Car Insurance delivers Velocity Points, Budget Direct offers savings and rewards, while Australia Post has discounts, Hadnagy says.

“Many insurance providers offer discounts if you hold multiple policies with them,” she says.

“Adjusting your excess payment will change what premium you pay upfront. Choosing a higher excess will lower your premium.”

RUNNING COSTS

A smoother drive saves money on fuel and wear and tear.

Hadnagy says carrying heavier loads reduce fuel efficiency, and travelling lighter can save up to 10 per cent in fuel.

Car insurance is a necessary cost, but do not set and forget. Picture: iStock

“Your car’s air conditioner drains the power and fuel much faster … and cars with tyres that aren’t inflated correctly can chew through more fuel,” she says.

Avoid idling where possible, Hadnagy says.

“If you’re going to be held up for more than 30 seconds, it’s actually better to turn off the car completely. Doing so could cut fuel usage by up to 10 per cent,” she says.

REPAIRS AND MAINTENANCE

Sort My Money founder David Rankin says maintenance and running costs, for the amount vehicles are used, are a large and expensive part of a family budget.

“If you can concentrate on it, you can get quite big savings on overall costs,” he says.

Rankin says people should not feel welded to their dealer’s servicing department, and looking around for alternatives can potentially deliver “a massive saving”.

“Go no-brand when servicing your car but don’t skip on servicing – it’s tempting these days to push it out,” he says.

Motorists can save money by planning their trips, Rankin says. “Even short journeys such as the school run,” he says. “Get more organised with kids’ activities.”

Originally published as Car costs rising everywhere, but savings are possible for drivers