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Economy causes car wash cuts

10th June 2010 Print

Cutting back on dining out might be an obvious saving as inflation eats into the domestic budget, but this is just one way Brits seem to be making their £ stretch further, according to new research from AA Financial Services.

At a time when the cost of fuel is soaring and the rate of inflation climbs above 5%, nearly a third of those questioned (29%) are attempting to use their car less and are saving on other things, including using the car wash, in order to meet the rising cost of living, an AA/Populus survey of 17,480 AA Members shows.

Mark Huggins, director of AA Financial Services, says that the research paints a picture of a nation that is becoming increasingly cautious about spending because of the poor state of the country's economy.

"It's not just cutting back on motoring spend, which accounts for perhaps the biggest chunk of most families' domestic budget - this caution is extending into all areas of life," he says.

"Getting on for a third (28%) of those surveyed say they are saving money by not eating out while a quarter (24%) are visiting the cinema or theatre less frequently.  People also say they are spending less on their weekly shop - perhaps cutting back on the luxuries in their shopping trolley: 16% saying they've economised here."

However, there could be a silver lining.  Huggins points out that at the beginning of the year, in the depth of the recession, more people were saving; and saving more money, than a year previously and the trend is continuing.

"During times of economic uncertainty many families budget more carefully and tend to save as much as they can, ‘just in case'.  The AA is taking record sums right now in savings deposits, especially in the Internet Extra Savings account.

"Putting money into a high-earning account means while you're working hard to make savings, your savings are working too," he says. 

However, motoring spend remains the area where most respondents say they'll reduce outgoings.  More than half (51%) say they are likely to use their car less and a fifth (20%) will ‘stretch' the interval between car servicing to save a few pounds.

And there may be some good deals to be had on the forecourt, as dealers attempt to change the minds of the 56 per cent of AA members questioned who say the economic situation will make them less likely to buy a car.

"Motorists can help themselves by shopping around for the cheapest pump prices.  They could also make their money go further by using the AA Reward Credit Card for their motoring purchases," Huggins points out.

For AA Members the AA Credit Card earns two points for each £1 spent on fuel and other motoring purchases and one point for each £1 spent on other shopping.  Non-members still earn points but at half that rate.