Fuel Prices Soaring: Should You Change Your Car to Save Money?

Diesel has hit two pounds a litre. Filling a 55 litre tank now costs well over a hundred pounds. At this rate, the petrol station should be offering finance, counselling and a free vomit bag. Meanwhile, you look at that bill and think, I need a more economical car, something smaller, perhaps a hybrid. Surely that would save me money? Possibly. There are people who could save a thousand pounds a year on fuel by switching cars, but then there are also people who could spend five thousand pounds changing cars and save just three hundred pounds in a year and still be trying to recover the difference 15 years later. So before you panic buy a different car, let's work through some of those numbers, shall we? I'm not the world's greatest mathematician by my own admission, but let's try and work this out. Could switching genuinely leave you better off or could keeping your car and maybe just changing how you drive save enough to make the whole exercise unnecessary? Let's find out right after this. On the 2nd of October, the RAC's average UK diesel price reached 200.01 pence per litre, passing two pounds for the first time. Average petrol was around £1.75. Now keep in mind that these are national averages, so your local forecourt could be cheaper or it could be considerably more painful. For someone who is commuting or making deliveries or running a business, this is a serious expense. Plenty of people have journeys that they need to make with very little flexibility about, you know, whether it's an optional or not. Now I have previously done a video covering 10 economical used cars that you should consider buying if you are thinking of changing, and that includes things like the Toyota Up, Toyota Yaris Hybrid, Toyota Auris Hybrid, the Volkswagen Up and the Honda Jazz, also with diesel options for those kind of longer journeys. Now I'll put that link above, below, whatever. Those cars remain worth considering, though the prices and running cost figures in that video might need checking against the current market. But having said that, it was only earlier this year that I did it, so it should still be fairly spot on. So in this video, we're answering the question that comes before changing car and that shortlist. Does changing your car actually make financial sense? So let's use 2 pounds a litre and 10,000 miles a year as a kind of average. We'll compare cars using the same fuel, and this is to keep the arithmetic, what little I can do of it, as straightforward as possible. At 35 miles per gallon, your annual fuel bill is approximately £2,600. At 50 miles per gallon, it falls to about £1,818. And at 60 miles per gallon, it's about £1,515. Therefore, moving from 65 miles per gallon to 60 miles per gallon saves roughly £1,082 a year. That's meaningful money. And moving from 50 to 60, well, that only saves about £303. Now both drivers end up with a 60 miles per gallon car, but their starting points produce very different savings. And of course, mileage matters because at 5,000 miles, your savings will only be half of what I've just said. But at 20,000 miles, your savings will double. A car that looks financially sensible for a motorway commuter would take years to justify for someone who's just driving it around town into the shops and back, etc. So use your actual annual mileage and your actual fuel economy to figure all of this out. Check what you're saving over several tanks of fuel. And don't go by manufacturer's figures because manufacturer's laboratory figures might be a shaky basis for spending thousands of pounds of your own money. You need to look at the real world figures, right? And if you're switching between a diesel and a petrol car, remember to use the correct price for each of those fuels. For example, at £2 a litre, a 60 miles per gallon diesel car will cost about 15.2 pence per mile. At £1.75, a 55 miles per gallon petrol car will cost 14.5 pence. The petrol car actually has the lower fuel cost per mile in this example, despite having a lower miles per gallon. So compare pounds and pence as well as miles per gallon. Now comes the expensive bit, acquiring the replacement. Suppose you sell your car for £7,000 and buy another for £10,000. Your basic cost of change is therefore £3,000. If you're moving from 35 to 60 miles per gallon, then your fuel saving of about £1,000 a year recovers that outlay in roughly 2.8 years, so three years. If you're moving from 50 to 60, then the same £3,000 outlay takes almost 10 years to recover through fuel savings. Spend £5,000 changing cars and those periods become roughly 4.6 years and 16 and a half years. 16 and a half years, by then you may have retired and you might be actually paying for fuel in social media credits. That's if any of us, of course, survive World War Three, which of course is coming. Create car content. Brown Car Guy has written the only comprehensive guide that tells you exactly how. Get it now from Amazon or Kindle Unlimited. Fuel payback equals cost to change divided by annual fuel saving. This calculation, believe it or not, is your first reality check. It's a bit simple though because it assumes the same annual mileage, fuel price and economy throughout that period. Remember though, if fuel becomes cheaper, which hopefully it will do at some point, then your savings will shrink even further and that payback for the cost of change will take longer. It also has limits. Your replacement car still has to have a resale value and your existing car would have one too. And so to judge the full financial outcome, you have to compare the depreciation, running costs and finance over the period that you expect to own each car, including the very likely values of the car that you've just bought when you come to sell it. For example, after three years, a 50 to 60 miles per gallon improvement has saved about 900 pounds on fuel. If changing car required 3000 pounds upfront, fuel alone has recovered less than a third of that outlay. Different resale values could change the overall result too. You also need realistic quotes. What will someone actually pay for your car three years from now? For example, what does the replacement actually really cost you? Add in any fees that you might have to pay, any work that a car would could need. Compare insurance, road tax, servicing and likely repairs. Now insurance theoretically should be less since a more economical car usually means a smaller engine car, but don't take that as red. Again, include finance interests. If you're boring, will that go up and down? How will that change? Check for settlement costs on your existing agreement. Will you have to pay something to get out of it? A lower monthly payment could hide a longer loan or a larger final payment. And then consider this. You already know your own car. You know its character, its foibles, how to wring its neck when you need to and how to get the best out of it. You've maintained it. You know its history and perhaps you recently replaced the tires or the brakes or the battery. That familiarity alone has value when the alternative is an unfamiliar used car with a suspiciously enthusiastic recent interior shampoo clean. If you were changing cars anyway, then sure, economy deserves a place in that decision making process. But if fuel saving is the only main reason that you are changing your car, then you need to look at all of these other numbers and interrogate them first and then think about how you really feel about switching from Old Faithful to an unfamiliar alternative. There's another option worth trying before you start booking the test drives, right? Improve what you're getting from the car that you own. In other words, learn to get the best out of Old Faithful. Suppose you average 35 miles per gallon and manage to improve that to just 40 miles per gallon, right? That's just 5 miles per gallon better. At 2 pounds a litre and 10,000 miles annually, you'd save about 325 pounds a year without the cost and hassle of changing your car. That's an illustration rather than a guaranteed improvement, of course. But it makes a point, right? Some drivers already drive quite efficiently and others may have room to improve. So try it out over a few comparable tank fuels or fuel and see what happens. Now I've covered fuel saving driving techniques before in another video and I'll put the link to that above or below, whatever, right? But you know what? Let me give you a quick recap. So first, anticipation. Look well ahead and keep a safe gap and ease off early when traffic slows. Charging towards a queue and then stamping on the brakes spends fuel getting you to somewhere that you are going to have to stop anyway. Accelerate smoothly. Keep the car in gear when slowing. The engine braking will help slow it down and use the gear that the engine can comfortably pull with, right? Allow yourself the power that you need for a safe maneuver. Getting onto a motorway safely takes priority over getting a better fuel economy out of your car. Smoothness is the key. So here's another tip. Drive like there's a bowl of curry that's sitting on the dashboard, an open bowl of curry, right? Your passengers, your wallet and your upholstery will appreciate it if you're as smooth as possible. Think also about motorway speed. Air resistance makes a higher speed more expensive. You know, choosing 65 miles per hour instead of 70 where conditions allow can actually reduce your consumption quite considerably. The saving varies from car to car and of course keep left when appropriate and remain considerate of other traffic. Third, check your tires. Use the manufacturer's correct cold pressure recommendations for your load. Underinflated tires can increase resistance and up your fuel use. Pumping them beyond the recommended pressure, however, introduces safety problems with the car. Fourth, take off unused roof racks and racks and clear out any unnecessary stuff that you've got lying around in the boot. You know, that roof box that you've kept since your summer holiday is collecting a subscription from your fuel tank, frankly. Fifth, look at your journeys. Could you combine errands? Could you avoid a regular traffic bottleneck or leave at a less congested time? There's often scope to make the same trip but with a little bit more efficiency. Check fuel prices along routes that you already use too. Saving five pence a litre on 50 litres will give you £2.50. Now, a long detour to collect that saving could eat into your economy very quickly but there are apps that you can use to check prices in your local area and you can just go and get the cheapest one. Keep up with servicing. Use the correct fuel grade that your manufacturer specifies. Don't put the more expensive premium in your car if it doesn't need it. The engine management wouldn't necessarily be configured for it anyway. Just see what the manual says. You know, and use stop-start features if your car has them. When it stops and turns off at a traffic light, it saves fuel. Use eco settings where appropriate. Keep the cabin comfortable and keep your windows clear because visibility is very important to maintain smooth driving. Oh, you know, and keep the windows closed, especially on a motorway because that also helps reduce drag. Remember to stay safe at all times though. Leave a proper gap, maintain control, you know, and never switch off the engine while you're moving. I know it's something we used to do in the old days but no. The temptation also might be to stay in two higher gear. Yes, a higher gear will give you more economy but if you need to accelerate out of a junction or while overtaking, then use the appropriate gear. This is Brown Car Guy's exciting new thriller. New York Times best-selling author Rick Hoskin said of it. It's a spy story through a different lens. Get it now at Amazon or Kindle Unlimited. So, should you change your car? Well, if you're starting with a very poor fuel economy, say you drive a big thirsty V8 and you're doing quite a bit of miles, then yeah, I think, you know, if you switch to something that is suitable at a modest cost, it might well be worth making that change. However, there's a weaker case when you're already getting 40-50 miles per gallon, you drive relatively little, and the cost to change might require expensive financing to make that happen. The thing to do is to match the replacement to your real journeys and your practical needs. Also, you might be considering to change to an electric vehicle but run the same ownership comparison using the charging prices that you'll actually pay and include any charger installation cost too. Keep in mind, a home charger could start from around £250 fitted if you qualify for a grant or you find a great deal somewhere. Otherwise, you might end up spending between £700 and £1,000 to get a smart charger or a home charger installed in your home and sometimes even that's not straightforward. You need to check that if you can actually do it or not on the property that you live in. So, yeah, you could save a lot of money on an EV but only if you can charge it at home and this initial outlay might be into that saving anyway. So, shop around carefully for the home charger as diligently as you would shop around for your next car. You could, of course, just plug your car into a wall socket but then it'll take a day and a half to charge. So, start with your mileage, fuel receipts, and realistic buying and selling quotes. Calculate the saving, check the ownership cost, and then make your decision. And then let the rest of us know how did it work out for you and let us know in the comments below. And tell us if you have decided that you are going to change your car because it has worked out for you or you've decided to keep your car because it just didn't work out. I want to hear what you found based on your own research and calculations. Probably better calculations than I'd ever make. Anyway, if you found this useful, interesting, informative, or entertaining, then do the usual. Like, share, subscribe, comment, all the rest of it and I'll catch you in the next one. If you found this video useful or entertaining, support the Brown Car Guide channel at these links. Hit like, leave a comment, and make sure you're subscribing.