YOUR MONEY: by Naomi Caine

Motorists are paying on average £2544 a year to run a car, 13.55% more than last year, according to Sainsbury's Bank - and the figures don't even include any interest payments on car loans.

The main reason for the big increase is the rising cost of fuel. The typical motorist who drives a Ford Focus 10,000 miles a year spends £1442 on fuel, a jump of 19% on the previous year. Tax has also gone up by 12.5% and servicing by 9% to a typical £300. Add insurance, MOT and roadside assistance and it comes to a grand total of £2544.

No wonder the latest figures from the Society of Motor Manufacturers show a steep decline in new car registrations: there was a drop of 21.2% in the number of new cars sold in September.

Household budgets are already under strain and the rising cost of motoring is forcing many people to rethink their car-buying plans. More than a quarter (26%) of motorists won't be able to afford a new car and 15% are set to spend almost £3000 less on their next car as economic uncertainty grows, according to a study by uSwitch.com Ashton Berkhauer of uSwitch says: "Our research shows the potential size and scale of the slowdown in car sales as motorists react to a looming recession. Some consumers are writing themselves out of the car-buying market entirely, some are reducing their planned spend while others are aiming to ride out the storm by holding on to their existing model for as long as possible."

Of course, you could save money by ditching the car altogether. But many people rely on their four wheels. So how do you drive down the cost of motoring?

FUEL
A number of websites including www.petrolprices.com allow you to compare the cost of fuel at local garages. If you have a supermarket loyalty card, you might also be able to get money off fuel.

Think too about the type of car you drive. Diesel versions of the Seat Ibiza 1.4 and the Volkswagen Polo 1.4 are among the most fuel-efficient cars on the road at 74.3 miles to the gallon, according to the Vehicle Certification Agency. If you prefer a petrol car, try the Toyota Aygo, Peugeot 107 or Citroen C1, all at 61.4. Compare those figures with a Chrysler New Jeep Grand Cherokee that manages 17.5 miles per gallon or the Range Rover 4.2 V8 Super Charged at 17.7.

INSURANCE
It can cost hundreds of pounds a year to insure a car, particularly if you are a young driver or you have a number of convictions. But there are ways to reduce your premium. First of all, scour the market for the best deal. The difference between the best and the worst quotes can be more than double. A number of websites allow you to compare premiums including www.moneysupermarket.com, www.gocompare.com and www.confused.com.

The best way to keep the premium down is to drive carefully. Motorists who are to blame for a road accident can expect their insurance premiums to soar by as much as 60%, according to Moneysupermarket.

Peter Gerrard of Moneysupermarket says: "Being at fault in a car accident is terrifying enough for any motorist, but with purse strings tightening all over the country a hike of over 60% on premiums should make people think twice about running risks on the roads. When an insurer risk assesses a driver, any history of accidents will no doubt mean motorists pay more."

Bus conductors are the most likely to crash while in their own cars - almost one in six, or over 16%. People with careers related to health and wellbeing are also more likely to be involved in an accident. GPs, speech therapists, psychologists, keep-fit instructors and surgeons are among the professions most prone to a crash. Low offenders include driving examiners, au pairs and magistrates.

If you resist making a claim, you can build up a no-claims bonus. The maximum bonus is usually five years, and it can knock up to 75% off the annual premium. The savings mean that many motorists are well advised to pay extra to protect their no-claims bonus.

You can also negotiate a bigger voluntary excess - the amount you agree to pay towards each claim.

For example, a 30-year-old man in Glasgow could insure his Honda Civic for £597.04 with no voluntary excess, or £381.60 with a voluntary excess of £500, according to figures from Swiftcover.com.

The make and model of car can affect your insurance premiums. A Smart car is one of the cheapest second-hand vehicles to insure, according to Swiftcover. The insurer also identifies the Skoda Fabia, Nissan Micra and Renault Clio among its top 10 least expensive.

TAX
The type of car you drive has a big influence on the amount of tax you pay. There are now seven bands of vehicle excise duty and cars are ranked according to their CO2 emissions. Vehicles in Band A that emit up to 100 grams of CO2 per kilometre pay no road tax. If you car is in Band G, emitting more than 225g/km, you could be hit with a tax bill of up to £400.

Cars in the zero tax band include Ford's new Fiesta 1.6 and the Volkswagen Polo 1.4. The highest band includes some fairly standard cars such as the Audi A4 Avant and the Vauxhall Zafira, plus a range of BMWs, Mercedes Benz and Volvos.

ROADSIDE ASSISTANCE
There hasn't been much increase in the cost of vehicle breakdown cover over the past year, as companies battle for your business. But you should still search for the best deal. A comparison website is a good place to start, but don't forget to try the supermarkets, too. You might also be able to get a good deal with loyalty schemes or your insurance company. People with a packaged bank account should check the terms and conditions because it might include breakdown cover.

There are different levels of roadside assistance so you could tailor your policy to suit your budget. A number of firms also offer a pay-and-reclaim service, which can work out cheaper. AutoAid, for example, will organise the recovery through its call centre. But you have to pay the breakdown company the full cost at the time and then reclaim the money later from AutoAid using receipts.