Car credit customers paying less in real terms

Contrary to popular belief the cost of motoring is actually going down in real terms. Car credit customers are set to benefit, according to a recent report from motoring organisation the RAC: "In real terms it is 18% cheaper to buy and run a car, including fuel costs, in 2008 than 1988."

Even so, some aspects of running a car are much more expensive than they used to be, and car credit customers need to make sure their money is stretching as far as possible. Fuel is an obvious part of motoring that is now more costly: it is now 200% more expensive in real terms to run a car than it was two decades ago.

The RAC report cited the average cost of owning and running a car as £5,627 a year. Half of that is depreciation, nearly £1,200 is fuel, and the rest is tax, insurance, car credit interest payments, maintenance, and breakdown membership.

As fuel is one of the biggest expenses of running a car, it makes sense to drive more efficiently. A recent test undertaken by the Driving Standards Agency shows that a typical motorist can save £500 over 10,000 miles by driving efficiently.

Techniques for smooth driving include not revving the car when idle, abandoning air conditioning, and switching off the engine when stationary. Not driving too fast is also important: driving at 70mph uses up to 9% more fuel than driving at 60mph, and up to 15% more fuel than driving at 50mph according to the Department for Transport.