Statistics show that UK annual inflation is currently just over five per cent for goods and services, however, drivers are worst hit by the economic downturn. The average cost of running a car has increased by 14 per cent compared to 2007.

Reports further suggest that the credit crunch has meant that the average driver now spends an estimated £1,441 on fuel, an increase of nearly 20 per cent. Additionally the cost of insurance has risen by almost six per cent to stand at £514.

At the same time, there are additional costs to contend with including insurance, servicing, parking, VAT, and most of the other driving charges that affects motorists on a daily basis.

Credit crunch or not, the cost of car insurance for women has remained generally lower than men’s. Experts say that this is because car insurance companies pay out less money for lady drivers. This means the company can pass on these savings in the form of lower insurance premiums.

Knowing your policy

However, the market is still saturated with even better deals for women looking for cheaper car insurance. Drivers are advised to shop around for cheaper deals as they could save up to £500 a year.

On the other hand, having a comprehensive policy can help save money on the cost of insurance especially if the policy covers a range of different circumstances including a replacement car if yours needs to be repaired. A good comprehensive policy should also have adequate breakdown cover and a 24 hour claims line.

Another point worth considering is that motorists should avoid choosing a policy purely on the basis of cost because having the cheapest one available is pointless if the excess is so high and they find that it is not worth claiming when something goes wrong.

A third-party policy cover is much more affordable than a comprehensive protection; however, it also means that drivers have to pay for claims not covered by the policy which can run into thousands of pounds out of pocket.

How to cut down costs

Market experts also say that where drivers need to use their car for regular trips, cutting back on fuel may not be an easy option although motorists can still save money by searching for the best price and trying to drive in a manner that will ensure less fuel consumption.

Motorists are also warned that not having an MOT certificate, road tax or insurance could land them in deeper financial trouble as penalties for these offences are stiff. They range from fines of up to £5000 for those driving uninsured vehicles with up to eight penalty points added to your licence.

The fine for driving without an MOT or tax is up to £1000. At the same time the performance of the car and its engine size can affect the cost of premium.

Vehicles with larger engines and body modifications are reportedly more expensive to insure. Women who pack their car at night in a relatively safe environment such as a locked garage can easily find a lower priced package.

Female drivers who take additional measures to improve the safety of their car by installing tracking devices or immobilisers are equally likely to attract discounts.