One in five motorists have said that they have downsized to a small car or just sold their car altogether since the onset of the credit crunch.
According to car insurance provider LV=, the 19 per cent of motorists who have downsized have saved an average £309 each on the running costs of their car, an estimated total of £4million.
Nearly a third of those who have downsized their car said they did so to save money on their car insurance
, while others did so to save on other costs such as fuel, which has become more expensive in the last 12 months, and to reduce the cost of road tax.
Those who have sold their car and not replaced but intend to do so in the next 12 months – 43 per cent of drivers – said that they will be opting for a second hand car to cut costs, and 66 per cent of those who have downsized said they could not afford a brand new car in the current economic conditions.
While most downsizers have done so on financial grounds, an ethical 15 per cent of British drivers said that they have opted for a smaller car to reduce their environmental impact.
To save more money when downsizing, LV= recommends that drivers opt for a car with a smaller engine, which will further cut the cost of car insurance, not buying a car which has been modified in any way, as this can greatly increase car insurance premiums, and opting for a common make and model, which will generally make it cheaper to repair. LV=
also urges drivers not to stick with their current provider, but to compare car insurance quotes
, telling their insurer if they keep their car in a garage, if they have low annual mileage, and ensuring they have the correct level of cover depending on if they use the car for business, commuting, or just for personal use.
"Buying a car is often the second biggest purchase people make after their house. So it's only natural that in the current economic downturn, when people are being more careful with their money, they also look to save on their motoring costs." said John O'Roarke, managing director of LV= car insurance
"This is undoubtedly a smart move, as the credit crunch looks set to bite deeper. By following the guidelines above, motorists downsizing should be able make significant savings every year without having to consider getting rid of their car altogether."
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