Cut your petrol bill by 50%

Here's one unique way you could potentially slash 50% off your petrol bill.

If you’ve filled up at the pumps recently, the rising cost of fuel has probably left a residual squeeze on your wallet.

The good news is, the supermarkets have recently entered a fuel price war, with Morrisons slashing the cost of its petrol and diesel by 2p a litre today. Asda immediately responded by announcing it too will be cutting its prices. This follows earlier price cuts by supermarket giants Tesco and Sainsbury's. In total, it means that prices have fallen by as much as 5p a litre in some forecourts over the past week.

Even so, there's no doubt that fuel costs remain high. We highlighted how you could cut your petrol costs by a third, and lovemoney.com readers chipped in some more handy ideas of their own, which you can read at the bottom of the article.

But could there be a longer term answer to this problem? Well, one solution could be to shun the petrol pumps and switch to LPG fuel.

Big benefits?

Liquid Petroleum Gas (LPG) or Autogas is another 'green' alternative to the traditional petrol or diesel engine.

By far the biggest benefit to converting your car is that fuel typically costs about half the price of standard petrol and diesel. You either buy a new car which uses LPG, or convert your existing car.

LPG in practice

That’s all very well, but how does it all work?

In order to convert your car, you will need to take it to a professional who will fit a second, independent fuel system with its own tank to the car, often in the space where your spare tyre would sit.

Once the conversion has taken place, you need to inform both your insurer and the DVLA that you have made the changes (your insurance premiums should not increase, provided it is fitted by an LPGA approved installer). You are then free to drive round, paying around half the price of your petrol compatriots.

And, as LPG is considered a ‘green’ fuel, if you drive in the capital you will also be exempt from the London Congestion Charge.

If you’re worried about the availability of LPG fuel, refuelling spots are becoming more common, though in some places they are still hard to come by.

Money saving site petrolprices.com will tell you the nearest stations supplying LPG fuel in your area. Simply register, tell it how far you’re willing to travel and it will inform you of the cheapest refuelling spots where you live.

In addition, UKLPG - the trade association for LPG - has a list of authorised retailers approved to convert your car, together with some handy hints if you’re considering changing over to LPG.

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Car number crunching

Well, that’s how it works. But is it really worth it?

Firstly, you have to consider how long it will take you to recoup the initial outlay for the conversion, which will set you back around £1,600 for a car or small van. To help illustrate this, let’s look at a couple of examples.

For instance, if you were a frequent driver, filling up your 55 litre Ford Focus once a week at 121p a litre*, a full tank would cost you £66.55 a week, or £3,460.60 a year.

One key point about LPG fuel is that although prices are half that of petrol, you don’t get as many miles per gallon with LPG fuel as you would with petrol, and 70 litres of LPG (66.1p a litre) will probably take you as far as around 50 litres of petrol.

So, in the interests of a fair comparison, a full (70 litre) tank of LPG will cost you £46.27 for the same week’s worth, or £2,406.04 a year.

Despite these adjustments, in this case, converting to LPG would still save you £1,054.56 a year, and you could recoup the cost of converting your car within just two years.

However, drive less frequently, and the savings are reduced. Using the examples above, if you only filled up once a fortnight, your savings would be cut to just £527.28 a year, and you would need around three years to recoup your costs.

Who will benefit?

I must admit when I first read about the benefits of LPG, I was very excited. On second thoughts, however, I realised the downsides are significant. As well as the extra space the tank will take up in your boot, if you don’t drive that much, it may take you a very long time to break even.

So, if you’re someone who clocks up a lot of miles, then converting your car might be worth it. As for the rest of us, we may be better off trying to make the most of the car we already have.

And, if you're a low user, you may even want to consider giving up your car altogether. Car clubs, for example, can be a good idea, and although schemes are usually confined to big cities, they could end up saving you a packet. You can read more about car clubs in the article, Cut your car costs in one easy step.

Alternatively, if you want to improve your fuel economy while beating road tax rises, you could always switch to a diesel car. With diesel fuel approaching £1.23 a litre, you may be put off -- but these cars provide a more economical, and cleaner way to get around. You can read more about this in Drive down your car costs.

LPG may sound like a dramatic step, but as we all know, sometimes desperate times call for drastic, if not desperate measures. Weigh up whether it is worth your while, because although it may sound like a radical step, making the right choice could soon mean you're laughing all the way to the bank.

*Petrol and LPG prices were taken from petrolprices.com on Thursday 20th May 2010.

This is a classic article which has recently been updated.

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