Running a car, saving money

I think my second biggest expense is probably running a car. The really annoying thing about that is that 70% of that goes to just getting to and from work. It pisses me off just how much I spend to enable myself to, basically, work for a couple of millionaires. I have to have a house near where I work. I have to have a car. I have to have a particular set of clothes that I wouldn't wear under any other circumstances other than maybe weddings and funerals. Seriously, when the fuck do you ever find yourself thinking "I know what I'll wear to the pub, a nice suit"?

Anyway, running a car costs a lot of money. Public transport here is non-existent: to do the 11 mile commute I'd need to cycle to the station, get at least two trains and then another 15 minute cycle on the other side. That's at least a 90 minute commitment before I even get into the shit-show of dropping off and collecting my daughter at school.

There are obvious things I try to do to keep costs low. I always buy a used car. Sure, I'd love a swanky, brand-new car straight off the lot. I've done it once and it was a financial disaster. After six years of instalments on my flash £20,000 car I now had something that was worth £1500. Eighteen and a half grand down the drain. It was nice to have a brand new car but eighteen and a half grand nice? I don't think so. A new car is only new for five minutes.

I also like buying sensible cars. At the minute, I've got a Skoda Octavia. It's practical, reliable and cheap to run. It doesn't turn heads but I don't care. What it does is save me money and provide a damn good service. When it does 60+ miles per gallon it makes me happier than some wank-machine that does 20.

I work the price comparison websites when it is insurance time as well. A couple of times my renewal has actually been the best price (that was with Co-op) which surprised me so maybe the market is finally becoming more competitive. But I still do comparisons. I also check which insurers or comparison sites will give me some money through Topcashback. If there is only a few quid in it then I'll go with the one that does cashback.

But how do you actually budget your costs for car ownership?

You need to know what your fixed and variable overheads are. Fixed overheads are the things that are not going to change. Your monthly finance payment, your road tax and your monthly insurance premium. These are simple to deal with, I know how much they are and I just set aside the right amount from my monthly salary. Easy.

Variable expenses are harder to account for. These are the things that vary depending on how much you drive. Do more miles, pay more money. Simple. Except that it is hard to predict. The way I do it is to work out exactly how much each mile I drive costs and then just count up how many miles I've driven (or planning to drive) this week.

Start with fuel. I always do a full tank when I fill up. I get roughly 600'ish miles from a tank so I generally fill up when I've done about 450 miles. So divide the cost of the tank of fuel by the number of miles you've driven. This gives me a price per mile and at the time of writing that is sitting at about 12.2p per mile. For the rest of the week I will knock off 12.2p for every mile I do from my weekly allowance.

Drive 100 miles, that's £12.20 off my pot of cash for the week. To make life easier, at the start of the week I make an allowance for my commute. That comes to 26 miles a day including the school run, 130 miles a week. I knock off 130 x 12.2p (£15.86). I know that I only need to account for anything over and above that 26 mile a day allowance.

Next thing is maintenance. Most cars have a fixed schedule for servicing and for bigger things like timing belts or gearbox services. If my car needs serviced every 10,000 miles and I know the service costs about £250 then that's another 2.5p per mile to add on. Timing belt is every 60,000 and is about £500 which is about 0.8p per mile. So looking at around another 4p per mile on top of whatever the fuel costs are. Usually at the end of the month I transfer whatever the maintenance costs are into a separate bank account so that I've got it safe if needed. It generally works out well so far.

What this doesn't cover is unexpected things like breakdowns. I know I should set some money aside for this but I end up never doing it. I think I need to make this one of my financial goals for this year. I don't want to get into the reactive mindset of "I've got the good credit card for emergencies". I want to have the emergency fund already there.

The final thing I do to try to save a little money is to just drive better. I've been really surprised how much a difference it makes just driving with a bit of thought. Not accelerating into red lights or queuing traffic, not hammering it up hills. That kind of thing. Just driving at the speed limit works as well. There are tons of websites on "hypermiling" if you want to go down the rabbit hole.

For me, I've found the best things are just be alert and show some common sense. Trying to drive so you rarely have to brake. Maintaining a steady speed so you aren't going up and down the gears. For urban driving I've found third gear is what wipes out my fuel efficiency so getting into fourth, and preferably fifth, as soon as possible and staying there is key. On the motorway just dropping to 60mph hikes up the fuel efficiency. In hill stretches I've found dropping to maybe 58 on the way up and 65 on the way down gives me the best balance of fuel consumption and journey time.

I like to turn regular journeys into a game where I see how good I can get my consumption on the trip computer. I don't care if I'm driving like an old man. Old men are usually good at saving money.