The cost of running a car is about to hit an all-time high, according to the AA: 58p per mile, up from 33p per mile in 1988 (based on a mid-sized car). The reasons? Fuel prices have climbed to a record; road tax for high-emissions cars could soon rise to £400 a year; insurance and garage bills are up; parking now costs about 40% more than it did just seven years ago; London’s £25 congestion charge for larger cars is looming; there is the prospect of another 2p increase in fuel duty in April; and drivers are paying an ever increasing number of fines for everything from parking offences to stopping on yellow box junctions.

PetrolPrices.com, a fuel price comparison website, predicts a litre of unleaded could cost as much as £1.50 by the end of the year. Pendragon, Britain’s biggest motor dealer, last week announced a slump in profits due to car sales stalling. And it’s no surprise to learn the number of motorists intending to replace their car in the next 12 months has fallen five points from a year ago to 20%, according to an AA survey.

Even those still planning to make a purchase say they will spend an average of about £1,000 less. Anecdotal evidence from car finance and leasing companies points to an increase in repossessions from motorists who can no longer afford their monthly payments.

For those not tempted by overpriced train tickets and irregular bus services, what are the options to help drivers keep motoring through the credit crunch? We’ve come up with the best money-saving tips and tricks for frugal motoring, from cutting fuel bills and getting the cheapest insurance to negotiating a good deal on your new car – without having to resort to a Perodua Kelisa (undoubtedly cheap but unlikely to make you cheerful).

FRUGAL REFUELLING

You can compare diesel and petrol prices on forecourts in your area at www.petrolprices.com. Enter your postcode and the website will find the cheapest fuel prices within a 10-mile radius. Last week there was a difference of 15p a litre between the cheapest and most expensive petrol and diesel prices (99.9p and 114.9p for petrol; 104.9p and 119.9p for diesel).

To reduce your fuel consumption, avoid sudden acceleration and braking, and try to retain a steady speed. Obey the speed limit on the motorway: driving at 85mph uses 25% more fuel than staying at 70mph. Underinflated tyres can also increase fuel consumption by up to 3%.

You could halve your weekday fuel costs by sharing the driving with a work colleague. Also, look for people in your area who drive the same route at www.liftshare.org . Londoners can also try www.londonliftshare.com .

CUT-PRICE COVER

The rule with insurance is simple: it always pays to shop around. Price comparison websites such as www.moneysupermarket.com and www.uswitch.com make this easier. Or you can try traditional brokers such as the AA (www.theaa.com ) or Swinton (www.swinton.co.uk ).

Young or new drivers could cut premiums by up to 35% by taking a Pass Plus test (www.passplus.org.uk ), which requires at least six hours’ extra tuition after passing your driving test, including lessons on driving on motorways and in the dark. Some insurers will also offer discounts to those who have passed the advanced driving test of the Institute of Advanced Motorists (www.iam.org.uk ).

If your car isn’t worth too much you might be able to settle for third-party, fire-and-theft cover, and if you don’t mind increasing your excess you can dramatically cut your premium. Those who have several cars registered to one address can save money by putting them all on one policy. Direct Line (www.directline.com ) offers a “multi-car discount”.

It also pays to make sure you don’t overestimate your annual mileage, and if you no longer use your car for work this can cut your premium. Adding an alarm or immobiliser may encourage an insurer to offer a discount, as will storing your car in a garage – or at least off the road.

PARKING PRICES

Parking costs in Britain have risen by 40% since 2000, according to a survey by Direct Line insurance last year. The average cost of leaving a car for two hours has risen from 86p to £1.21 nationally. In London drivers can pay £10 to park for one hour in some prime spots, and in Hertfordshire parking charges have shot up from an average of 10p for two hours seven years ago to more than £1 today.

To avoid the most pricey spots, you can compare parking prices at www.youcanpark.com or for airports try www.airport-parking-shop.co.uk . Also consider hiring someone’s personal parking space as an alternative to expensive city centre or railway car parks. Sites such as www.yourparkingspace.co.uk can help.

CHEAP FIX

You can save money on maintenance by going to a cheaper independent dealer rather than a franchised one. Since October 2003 it has been possible to go to nonfranchised dealers for repairs and servicing without jeopardising your warranty. However, it’s not always that simple, as some independents will not have all the diagnostic devices or fault-finding codes to enable them to do the job.

And if the dealer decides the garage is not up to its standards, it could still contest any warranty claims. To be on the safe side, ask your franchised dealer for a list of approved independent garages and make sure you get all the requisite service stamps, and retain copies of invoices, so as not to lose money on the resale value of your vehicle.

An MoT costs a maximum of about £50 and garages make most of their money repairing problems identified in the test. For an unbiased assessment take your car to a local government test centre (most councils have them to MoT their own vehicles). They are not able to offer repairs, only to carry out inspections, so there is no incentive for the mechanics to discover problems, which could save you money in unnecessary maintenance costs. Find a list of centres at tinyurl.com/34gr54 .

GOOD COMPANY

The tax you pay on your company car is now based on its carbon dioxide ) emissions and the list price. The higher the list price and the higher the(CO2 the more tax you’ll pay. If you CO2 visit www.comcar.co.uk you can type in everything you want your company car to be – number of doors, list price, Euro NCAP safety score and even acceleration time – and it will give you a list of suitable cars and tell you how much tax you will pay.

With tax rules tightening on company cars your other option is to opt out and take the cash instead. Your company will give you a monthly amount that you can use to fund your own car purchase or leasing deal. You may also get a “pence per mile” rate, which should cover your fuel and contribute towards your servicing and insurance costs. Taking the “cash for cars” option allows you to run what you like, within reason, so you can haggle hard on your next purchase.

AVOIDING TAXES

With Ken Livingstone, the mayor of London, planning to introduce a £25 congestion charge for cars in band G for road tax (those with emissions of more than 225g/km), motorists who travel in and out of central London will want to choose their new car wisely.

Go to www.vcacarfueldata.org.uk to find the emissions and tax band of your chosen make and model. Cars in bands A and B (up to 120g/km) will be exempt from the congestion charge when new rules come into force on October 27. They include some versions of the Ford Fiesta and Ford Focus, the Citroën C1, the Fiat 500 and the Mini Cooper diesel.

Diesel models generally have lower CO2 emissions than petrol ones, and even some diesel versions of luxury SUVs such as the BMW X5 and Land Rover Freelander fall below the band G cutoff and will continue to pay the current £8 charge.

Drivers with band G cars may have to pay up to £400 a year in road tax when, as expected, rates are revised in April, as indicated by Gordon Brown in the last budget. An increasing number of councils are also introducing punitive parking charges for larger, more polluting vehicles. Manufacturers are rushing to cut emissions, however, so it’s always worth checking the precise figures – most new versions of popular models now have much lower emissions than just 12 months ago.

SMALL IS BEAUTIFUL

Small, economical cars are not only cheaper to buy, run and tax, they also attract plenty of used car buyers so tend to hold their value better. A new Ford Mondeo will cost a lot more than a new Ford Fiesta, but wind the clock forward five years and the difference narrows.

For example: a Ford Mondeo 2.0 Ghia registered 2002 02 with 70,000 miles cost £17,040 when new and has a value today of £4,095 on a dealer forecourt. By contrast, a Ford Fiesta 1.4 TDCi registered 2002 02 with 70,000 miles cost £10,535 new and is now valued at £4,125. That’s a price difference of about £6,500 when new, down to just £30. Alternatively, buy a new Ferrari 599 GTB Fiorano, keep it for long enough and you’ll probably make a profit.

Other money-saving options for used cars include asking your dealer which models he’s been struggling to shift and what sort of deal he’d be prepared to offer on them. Some vehicles stay on the forecourt for weeks, for no apparent reason, and all the time the dealer is losing money.

Also, rather than opting for the sort of car everyone wants – one owner, low mileage, in an inoffensive colour, with a decent specification – try to be flexible. A car with a nonmetallic finish, for example, can fetch anything from £200 to £2,000 (on a luxury saloon) less than a metallic one, and if you can manage with three doors rather than five, you could save another £500 on a hatchback.

DRIVE A HARD BARGAIN

Forget the list price of your new set of wheels, you can negotiate a discount on most new cars on sale today. Always take the vehicle for a test drive and, on a used car, make a mental note of any faults or downsides. Pointing out the car’s disadvantages gives you some ammunition to fight for a lower sale price.

Before you make an offer, give a roundup of the vehicle’s pros and cons – this lets the seller know you’re interested but puts some doubt in their mind about whether they can complete the sale.

Never make the first offer, ask the seller how much they would realistically take for the car. When they reply, ask again, repeating and emphasising the word “realistically”, and reminding them that you are here to do a deal. As soon as they give you a lower price, look them in the eye and make them an even lower offer. Then shut up.

The seller now has two choices: a) they’ll accept your offer – which unfortunately means you’ve offered too much – or b) they’ll come back with a counter offer at a higher price. If their counter offer is too high, stand your ground and haggle further. When it looks as if they’re thinking about accepting your offer, offer them your hand. It’s a natural instinct to shake someone’s hand back, so the deal may well be done while the seller was actually still wavering.

One other tip: leave a brochure and price list from a rival dealer on the back seat of your car where the salesman can see it – nothing makes a salesman hungrier for your business than the thought of losing it to a competitor.

THE NEW-CAR BASICS

A survey published last week by Which?, the consumer organisation, found that using internet car brokers could save buyers an average of 11% on the price of the 15 most popular new cars. But as the online brokers are only acting as middle men and taking a cut of the discount as part of the deal, the really canny move would be to find out where they buy their cars and pocket the full saving yourself.

The big city dealers may seem like a good place to start, but it is often those struggling out in the provinces that could be willing to do a great deal on a car they’re finding it difficult to shift. You can get a list of dealerships from the manufacturers’ websites, then you’re free to ring around to try to find the best bargain.

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