Cut fuel spending: the best points for petrol
By some estimates, the average motorist now pays a staggering £1,700 a year on petrol or diesel, 10% of most incomes.
In just a few steps - three, in fact - you can reduce that eye popping amount by hundreds of pounds.
1. Get the lowest prices
Using a postcode based comparison service like petrolprices.com can help to find the forecourts near you with the lowest petrol prices.
It's a free service, also available as an iPhone or Android app, although you do have to register to see the results.
It's worth noting that supermarket petrol prices are usually lowest.
According to the AA's fuel price report for August 2014, supermarket unleaded petrol prices are 1.6p per litre lower than the UK average, the smallest gap for some time, though it widened during the August bank holiday when competition increased.
In addition, supermarkets often run reward point promotions on fuel that can cut prices even further.
2. Use the right card(s) to pay
Once you've found the cheapest place to buy, it's time to get the best value for money on the spending you can't avoid.
Cheaper prices per litre beat loyalty points hands down: going to a more expensive station for the points is worthwhile.
But if your cheapest station happens to have a loyalty scheme, and most do, it makes sense to cash in.
As well as Tesco shopping Clubcard points can be exchanged for MOTs with Halfords Autocentre and the full range of RAC roadside recovery cover.
Nectar cardholders collect 1 point for every litre of fuel they buy at BP fuel stations and 2 points for every £1 spent in the shop
You can compare the Nectar and Clubcard schemes in general here.
At Morrisons pick up a Morrisons Miles Card: there are 10 miles to every litre and 5,000 miles means £5 to spend in store.
Note that all 5,000 miles must have been earned on the same card so it might be worth households sharing to get the cash more quickly.
The petrol stations
- BP: As we noted above, BP are allied with Nectar and those that buy Ultimate fuel can get double points. To be in Ultimate Club you'll need to buy 150 litres, about four full tanks, of Ultimate in one quarter but it's more expensive so only worthwhile if you'd buy it anyway.
- Esso: You can now pick up Tesco Clubcard points on Esso fuel. The most points are available at Tesco alliance stations (1 point for every £3 spent). Elsewhere it's 1 point for every 2 litres of fuel.
- Shell: The Shell Drivers Club and V-power Clubs offers shopping vouchers, Avios and other rewards. V-power offers double points when cardholders buy the fuel of the same name but, as with BP, that's more expensive.
- Texaco: Star Rewards offers a point to every litre. 500 points is £5 off fuel or, if you prefer, a free gift card. Pick up a card in store.
- Total: Total Rewards is no more but we're keeping our eyes peeled for similar promotions in the future.
Credit cards: petrol specific rewards
58% of credit cardholders regularly used their credit cards to pay for petrol in 2011, according to Equifax. But most weren't getting much in return.
Perhaps that's why we've seen a wave of motoring specific deals hit the market in the past couple of years.
Tesco Clubcard credit card holders paying for their petrol at Tesco Petrol Filling Stations get double the number of points ordinary Clubcard customers do, 1 point to every £1.
The card also offers an extra point for every £4 spent anywhere.
The Sainsbury's Nectar credit card offers extra Nectar points on Sainsbury's shopping, so after the introductory bonus period you can earn 2 Nectar points for each £1 spent on Sainsbury's fuel, plus 1 Nectar point per litre bought (including Nectar loyalty card points).
The AA Rewards credit card (cost of credit) offers points on purchases with double points for spending on motoring: that includes any spending that goes on diesel, petrol or LPG Autogas.
AA points are collected as: £2 spent = 1 AA point on ordinary purchases, £1 spent = 1 AA point on motoring spending.
AA members have the above points doubled.
Points can be exchanged for AA products including AA Breakdown Cover and motoring products such as Sat Navs.
They can also be swapped for shopping vouchers or cash back but sticking with the AA rewards gets cardholders more, in real terms, for their money.
Credit cards: other rewards
Petrol specific rewards won't necessarily be the most rewarding deals for all motorists - particularly for those who are already part of a loyalty scheme or are big spenders across the board.
With that in mind, we've also listed general credit card rewards (although these are covered more fully here) with notes on how they can benefit drivers.
Cash back is the simplest credit card reward around.
Cardholders earn a percentage (albeit not a high one) back when they pay so it's a particularly good reward for taking the sting out of an unavoidable but expensive cost like petrol.
Some credit cards even offer higher cash back rates on petrol spend.
For example, Santander's 123 credit card offers a 3% cash back rate on petrol spending as well as 1% on supermarket spend and 2% on spend at department stores.
Cardholders can only earn cash back on petrol on up to £300 a month but that could still mean significant earnings. Over the course of the year, those spending that full £300 on petrol every month would earn £108.
Santander is just one cash back credit card option, though.
Here's a quick run down of the rewards a cardholder paying for petrol with a 1% flat rate cash back credit card could expect.
|Weekly petrol spend||£30||£50||£70||£100||£120|
|Cash back earnings||£15.60||£26||£36.40||£52||£62.40|
For more information see our main article on earning cash back here.
It's well worth noting, at this point, that reward credit cards won't be suitable for all drivers.
Once cardholders start paying to borrow the value of their rewards plummets.
Look at the cash back table above, for example, the cardholder spending fifty pounds a week on fuel will have to pay off two hundred at the end of the month.
With an APR of 14%, that's just over £2 or 7.7% of the cardholder's annual cash back earnings and note that both balance and interest rate are conservative for these types of card.
In short, the golden rule is to: always pay back the card balance in full at the end of month.
Those who are concerned that they wouldn't be able to follow that rule would be better off by far concentrating solely on ways to cut the cost of motoring that don't revolve around revolving credit.
That's the loyalty schemes above and the efficiency tips below.
3. Improving efficiency
Getting something back on the, inevitably, high cost of driving is great.
But doing something to lower those costs, even if it's just to make them eyebrow raising rather than astronomical, is even better.
Keep your car in good nick
Removing excess weight (taking out heavy loads, removing extras like roof racks and bike racks) and checking tyre pressures regularly makes vehicles much more fuel efficient.
Drive more slowly and more steadily
Smooth driving in higher gears uses less fuel: even Jeremy Clarkson has had to relent on this driving efficiency rule.
Avoid using heating and air conditioning
These two are fuel thirsty and often used unnecessarily.
Remember that short journeys are costly
According to Santander Credit Cards, the UK has 11.4 million 'one-minute motorists' who regularly make less than 0.5 mile car journeys.
Advising drivers to simply use their cars less can sound glib but, as those statistics show, sometimes it's a warning that's well worth heeding.
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