Car Running Costs

Drivers really are driving less – and combining trips

Drivers are feeling the pinch of the £80 fill-up, and as a result they are economising according to a study of fuel transactions on the AA's Credit Card.

Since August 2010 the number of visits to petrol stations made by drivers paying with their AA Credit Card has fallen by 12%, from an average of 3.4 fill-ups per month to 3 at the end of April. Meanwhile the average spend per transaction has jumped by 17% from £38.65 to just over £45, as they take the opportunity to do other shopping at the same time.

This means that, on average, AA Credit Card holders are spending £135.57 per month at petrol stations,* compared with £131.41 in August, despite filling up less frequently. However, the money they spend increasingly includes items other than fuel. This is confirmed by recent findings from the Office of National Statistics, which show that small stores, including those attached to garages, are doing better than supermarkets.

In August 2010 the average cost of a litre of unleaded petrol was 116.5p (£5.29 per gallon). In April 2011 this had risen by almost 20p to 135.8p (£6.17 per gallon). The price of diesel rose by nearly 23p, from to 119.2p per litre (£5.42 per gallon) 142.0p per litre (£6.46 per gallon).

The findings confirm AA/Populus research earlier in 2011, which showed that in response to increasing fuel prices 51% said they would drive less.**

Mark Huggins, director of AA Financial Services, says that the AA Credit Card transactions underline that families really are 'feeling the pinch' as car running costs eat into their budgets.

"Not only are people hanging on to their cars for longer and are planning to spend less when they change their car,† they are clearly driving less too and are attempting to combine trips to save fuel.

"When they visit a garage to fill up with petrol, they are filling up with other essentials as well, such as groceries, to save making another car trip to the supermarket."

The AA's Credit Card is designed to reward motoring spend. The card earns points on all card purchases and double points on fuel, including fuel bought from supermarket petrol stations. What's more, AA Members earn points at twice the rate of non-members. Points can be redeemed for AA products and cash back, as well as a wide range of items, including high street shopping vouchers and special days out.

"The reward system helps to make your motoring £ go a little further, especially if you are an AA Member. Using the card for fuel and other motoring costs can offer up to 4% back if points are redeemed on AA products or services," Mark adds.

The AA Credit Card (16.9% APR representative variable) currently offers 0% on all card spending for 10 months.

AA Credit Card summary

  • 0% interest on all card purchases made with the AA Credit Card for 10 months from the date the account is opened
  • 0% on balance transfers for 12 months (transfers to be made within 90 days of account opening, 3% handling fee applies)
  • Card earns two points for each £1 spent on fuel and other motoring purchases for AA Members; half that rate for non-members
  • Card earns one point for each £1 spent on other non-fuel/non-motoring shopping for AA Members; one point for each £2 spent for non-members
  • Points can be redeemed for cash back or items chosen from an online retail catalogue, including AA products and services
  • Motoring spend includes: purchases from any car garage (eg for parts, repairs, servicing, MOT testing); fuel purchases (diesel, petrol or LPG Autogas) from any fuel stations including supermarkets; AA products and services purchased directly from the AA
  • 16.9% APR representative variable. Representative example 16.9% pa variable on card purchases. This is equivalent to 16.9% APR representative variable based on a credit limit of £1,200

* The results are for all spend at petrol stations and may include other items other than fuel.

** AA/Populus research January 2011 amongst 15,200 respondents.

† AA/Populus Car Purchase Index, January 2011: 33% plan to buy another car within 24 months compared with 42% a year previously; 26% intend to spend £5,000 or less on their car compared with 23% last year and 19% in 2009.

MBNA Europe Bank Ltd, a wholly owned subsidiary of Bank of America Corporation (NYSE: BAC), provides the AA Credit Card.