Reducing monthly outgoings is likely to be high on the priority list for people whose incomes have been hit by the coronavirus pandemic – and cutting travel costs can be a good place to start.
Many of us have already seen our spending on fuel plummet during the lockdown due to reduced car usage, but there are plenty of other ways to lower the amount we spend on getting around.
Here’s our rundown of some of the options you may want to consider.
Find out if you’re eligible for a car insurance refund
Some insurers are offering refunds to motorists to reflect the fact that fewer cars have been on the road, which has resulted in fewer claims. Admiral for example, is giving a £25 refund to all customers for each car and van covered by it on 20 April this year. The refund will be credited to customers’ accounts automatically by the end of May. Admiral has said it will contact all customers between now and the end of May with more details about the refund. Find out more at Admiral.com.
LV= is also offering refunds to car and motorbike insurance customers, ranging from £20 up to £50. However, you’ll only be eligible for the refund if you can prove you’ve been financially affected by coronavirus. For example, you should qualify for a refund if you’ve either been made redundant since March 1 this year, or you’ve been furloughed but haven’t received money from the coronavirus Job Retention Scheme. Alternatively, you may be eligible if you’re self-employed and haven’t been able to work or trade due to the pandemic, and you haven’t yet received money via the Self-Employment Income Support Scheme. If you meet the above criteria, you can request a refund by calling LV= on 0800 085 5608. If your mileage has fallen significantly since lockdown rules were introduced, it’s worth contacting your insurer to see if they will offer you a refund. A spokesperson for the Association of British Insurers(ABI) said: “Your motor insurer can advise on any options that may help reduce your premium, or if you are worried about being able to continue to pay premium instalments. Any premium adjustments or refunds will be a matter for individual insurers.”
The city regulator the Financial Conduct Authority (FCA) has also ordered insurers to look at other ways they might be able help customers, including reducing their monthly premiums, waiving fees for adjusting or cancelling cover and relaxing charges or interest for missed payments, so contact your insurer and ask how they might be able to support you. You can find out more about the FCA’s guidance for insurers here.
See if you can defer your car insurance payments if you're struggling financially
Since 18 May, insurers have been obliged to offer customers who are finding it difficult to make ends meet due to coronavirus, a payment holiday lasting between one and three months. If you need a break from payments, you’ll need to request one from your insurer – they won’t be granted automatically. The last date you’ll be able to request a payment holiday is 18 August.
Shop around for cover
If your car insurance policy is up for renewal soon, don’t just sit back and wait for your existing insurer to auto-renew your policy. Insurers typically reserve their best deals for new customers, meaning those who auto-renew end up paying much higher premiums than they’d be offered if they switch to a different insurer.
According to comparison site GoCompare.com, the practice of auto-renewing costs motorists £1.2bn a year in higher premiums, a cost which has risen by 22% in just six months. On average, drivers have been with the same insurer for 2.6 years, while 13% haven’t changed providers for five years or more, despite the fact that switching could typically save them £240 a year (or £20 a month).
Lee Griffin, chief executive at GoCompare.com said: “Auto-renewal means that drivers remain legally insured to drive, without having to engage in the renewal process. But that convenience can come at a very high price. Those who allow their policy to roll-over for another year, can pay hundreds of pounds extra for the privilege”
As well as GoCompare, there are lots of comparison sites, such as MoneySupermarket, Confused.com, and Compare the Market, which enable you to compare costs quickly and easily. Remember that some of the big insurers such as Direct Line and Aviva don’t feature on comparison sites, so it’s worth getting quotes from them too. Find out more about reducing insurance costs in our article Five ways to cut car insurance costs.
Find the cheapest fuel
Petrol prices have fallen below £1 a litre in recent weeks, following a significant fall in oil prices, but costs can still vary widely depending on which petrol station you visit. You can search for the cheapest fuel prices in your area at Petrolprices.com, which has data for nearly 8,500 petrol stations across the UK. According to the site, you could save as much as £220 a year by comparing prices before you buy and using the cheapest petrol stations near to you.
You can help reduce your fuel consumption by making sure your tyres are fully inflated. If they aren’t you’ll use more fuel because there will be more friction between the tyres and the road.Try to keep your revs down too, for example, by making sure you drive in the right gear, as this can also help you save on fuel.
Consider car clubs
If you think that you’ll be using your car a lot less as a result of the Coronavirus, then ditching your car altogether and signing up for a car club could be one way to substantially reduce your annual travel costs
Car clubs typically charge an annual fee, usually between £60 and £100, and then an hourly rate, typically starting from around £5.
According to the Money Advice Service, if you drive less than 6,000 miles a year, joining a car club could save you over £3,000 compared to running your own car, and you don’t have to worry about servicing or repairs. However, this option will only really be practical if you live in a town rather than a rural area and can easily walk or cycle to your nearest car club car. You can check if there’s a car club service operating near you here.
Some car clubs have temporarily suspended their services during the pandemic, whilst others remain open and are ensuring cars are thoroughly cleaned after each use to prevent the spread of infection. For example, Enterprise Car Club is still operating, although it has introduced a new booking service which you can read about here. Prices to hire an Enterprise Car Club car vary depending on where you live, but there’s typically a £60 annual membership fee, with hourly costs to rent a car ranging from about £3.50 to around £6. Zipcar is also still operating, and again has introduced stringent cleaning after cars are rented to help protect its customers. You can either pay £59.50 a year or £6 a month to join, and can then rent a car starting from £5 an hour. Find out more at Zipcar.com.
Think about switching from four wheels to two
The Prime Minister Boris Johnson and the transport secretary Grant Shapps have both suggested that people should avoid public transport and cycle or walk to work if possible as the virus is known to spread less outdoors. Cycling is not only free, but has the added benefit of being better for the environment and your health than driving.
If it’s been a while since your bicycle has seen any action, the government has announced that from next month people will be able to claim a £50 bike maintenance voucher to help towards getting their bikes back into roadworthy conditions. Details on how to claim the vouchers are expected to be released in the next few days.
If you don’t already have a bike and are thinking about getting one to commute with once lockdown ends, then you might be able to benefit from a tax-free bike through the Cycle to Work scheme. Find out more about how this scheme works here.
If you’re self-employed, you can still sign up for the scheme provided you receive a salary through the Pay As You Earn (PAYE) system. That means if you run your own limited company as a director, you’ll be able to apply, even if you’re the only employee, but you won’t be able to join the scheme if you’re a sole trader.
If you’re thinking about getting into cycling for the first time, you can also check out our Beginner’s guide to cycling for some tips on how to get started.
Get your money back from season tickets
Many people will have bought rail season tickets at the start of the year which they will no longer be using due to lockdown restrictions. It is possible to get a refund for any ticket that is no longer required, so contact the train company or the website you bought the ticket from to find out how much you might be entitled to. There are 28 major UK train operators, each covering different geographical areas. You can find their contact details here. If you bought your ticket online, you’ll usually be able to request a refund online too. If you bought it at a ticket office, you can either return it to any ticket office managed by your train operator, or you may be able to send it back by post if your operator offers a refund form you can download, print off and send to it with your ticket. Bear in mind that some ticket offices are currently closed due to coronavirus, whilst others have reduced opening hours. Use National Rail’s Station Finder to look for information specific to ticket offices near you.
To qualify for a refund, you must have at least seven days left unused on a monthly or longer season ticket, or at least three days remaining if you’ve bought a pre-paid weekly ticket. If you have an annual ticket, some operators require that you have three months remaining in order to be able to claim a refund. Refunds are worked out from the date you hand the ticket in and are the difference between the amount you originally paid and what you would have paid for a season ticket ending on that date.
You can also get an Oyster card season ticket refund if you’ve got six weeks left on an annual ticket, seven days left on a monthly ticket or three days left on a seven-day ticket. You can apply for an Oyster refund by calling 0343 222 1234 (the line is open from 8am to 8pm seven days a week and call charges may apply). Find out more at the Transport for London website.
Take advantage of travel discounts
Although you should try to avoid public transport at the moment, if you do have to use it or are planning to do so once lockdown measures are relaxed, make sure you take advantage of any discounts you might be eligible for.
For example, if you live in London and meet the age criteria, you’ll be eligible to apply for a Freedom Pass which gives you free travel across the capital and free local bus journeys nationally. The eligibility age for the Freedom Pass is rising in line with the women’s state pension age – you can find out when you’ll qualify for yours by using the eligibility checker here.
If you’re aged 60 or over and travel regularly by train, you may want to consider buying a Senior Railcard, which costs £30 for one year of £70 for three years and entitles card holders to a third off rail fares. Find out more here.
If you live in Scotland and travel regularly by train, if you’re aged 50 or over and sign up for a ‘Club 50’ card costing £15, you can save 20% on Advance and Off-Peak tickets with ScotRail. You’ll also get a 50% discount on hot and cold soft drinks from the catering trolley. Learn more about Club 50 here.
Some regional rail operators offer their own scheme too, so it’s worth checking if yours does. For example, Greater Anglia runs a Club 50 scheme which costs £20 a year and you’ll get 20% savings on Off-Peak and Advance fares online, plus 2 for 1 entry to over 150 of London’s top attractions. Find out more here.
Have you found other ways to reduce your travel costs, or are you planning to change the way you travel post lockdown? We’ve love to hear from you at [email protected] or leave a comment below.