Frugal and safe motoring

For most people holidays involve travel. It’s therefore an appropriate time to remind motorists that safe driving also makes financial sense.


We have done some number crunching using the latest motor vehicle operating cost report. This is what we found.


The cost of owning a vehicle (ignoring any interest cost or lost income opportunity) ranges between $1,000 and $1,500 a year depending on the value of the car (the main difference being insurance).


It’s in the running costs that the cost gap between owning a small or a large car starts to open up. Small cars (less than 1500cc) cost about 21 cents a kilometre to run, 27 cents for a medium sized car, and 35 cents for a large vehicle (+3500cc). Those cents become significant dollars when the running cost is multiplied by the 14,000 km an average vehicle does a year, and ranges between $3,000 for small cars to $5,000 for large.


The much larger “running” cost is depreciation, or loss of resale value. The oily rag rule here is to buy used not new. If you buy a brand new car you are likely to lose 30% of its value by the end of the first year, 15% in the second year and 5% every year after that. If you buy a used car that is one year old it will probably lose 25% in the first year of ownership and about 7% every year after that. If you buy a used car that is two years old or older, you can expect to lose about 10% of its cost every year.


The bottom line is that trading down to a smaller vehicle and buying a good second hand vehicle, will save significant dollars, but check that the smaller vehicle is actually more fuel efficient. According to the website, “generally, larger engines use more fuel than smaller engines, but within each engine size there is a wide range of fuel consumption rates. For example, the most efficient three-litre engine uses fuel more economically than the least efficient 1.6 litre engine.”


An oily rag reader says the best buy is a car that is a few years old, with around 80,000 kms on the clock. It should give trouble free motoring for at least another 100,000 kms, or about 7 years use for the average family.


Here are some other ways to reduce motoring costs:

  • Bike or walk instead of taking the car! It is estimated that half of all journeys are less than 3km. Biking is four times faster than walking, and takes about the same time as a bus trip. And better still, the cost of buying and maintaining a bike is about 1% of the cost of buying and maintaining a car!
  • Sell the seldom-used vehicle and replace it with a motor scooter or bike – if feasible.
  • Become a better driver. Drive with a “soft” foot on the pedal. A manic driver, who breaks heavily into corners and accelerates out of them, will use 25% more fuel and a fast driver, 10% more, than a smooth driver. Slowing down from 110 km to 100 km will result in a 15% fuel saving. You will also avoid speeding tickets, and be safer!
  • Make sure tyre pressures are right. According to Beaurepairs, every 10% under the vehicle manufacturer’s recommended pressure costs about 2.5% in extra fuel consumption.
  • Turn off the air conditioner. A car’s air conditioning system needs power, which comes from the engine. Air conditioners can use about 10 per cent extra fuel when operating.
  • Make sure your vehicle is tuned. A poorly maintained vehicle will consume 5% more fuel.