No matter how you slice it, vehicle ownership is not cheap. From paying for your new car to buying gas and completing maintenance as it gets older, the costs can really add up over time. But there is not much you can do in this regard.
You need your car for grocery shopping, to get to and from work, and to get your family from point A to B.
While you can’t get away scot-free when it comes to vehicle costs, you can be proactive by making smart decisions that can limit the amount of money that you need to spend each month.
It will take some work and strategy on your end, but by being smart about usage, maintenance, insurance, and your monthly payment, you can make car ownership a more affordable adventure. Let’s look at some tips for how you can save money over the long term.
Buying a Car
While this article will mostly discuss saving money once you have the car and you are driving regularly, it will touch on strategies to save money when you first buy your vehicle. After all, if you can get a good deal at the dealership, you could be paying less for your monthly payments.
Once you have a car in mind, do some research before heading to the car lot. Compare prices online and talk to your bank to find out the best loan rates for the current auto market. With this information in hand, you can then negotiate with the dealership by not only asking for a lower price but by doing so with facts to make your case.
This will likely catch the salesperson off guard, and they may take you more seriously. As a result, you may leave the lot with a better deal.
You can also research the dealership to see what other cost-saving options are available, like the ability to trade in your existing vehicle for a credit towards the new purchase.
When you do decide on an option, be sure to read the fine print on the paperwork to ensure that you aren’t paying for any extras that you didn’t sign up for.
There is also the important decision about whether to buy a new or used car. Many people like to buy new cars because they don’t have an extensive ownership history and they will likely run fine without major maintenance for a long time. However, many experts recommend buying a used car because taxes and insurance will likely be more affordable and they typically cost less upfront.
While you own and drive your car, it must be insured at all times, which costs money. However, there are important methods you can try to get a lower monthly payment. For one, if you have teen drivers, keep them off of your policy. On average, insurance policies cost 80% more when youngsters are included due to their inexperience on the road.
When it comes to getting insurance, make sure to shop around and get quotes from several different reputable companies so you can see what is out there. If you already have homeowners insurance, consider bundling with your existing company to save even more money.
If you know that you drive less than the typical person, let the company know. The less you drive, the smaller the chance you will get into an accident and your payment could be lower because of it.
If you are generally a safe driver, then your insurance costs will lower over time. Be smart behind the wheel and many insurance companies will give you a discount for doing so.
If you are very confident in your defensive driving, consider changing your policy to have a higher deductible. While you would need to pay more if you got in an accident, your premium will likely be drastically less.
Paying Down Your Loan
When you buy a vehicle, it is likely tied to a car loan that could go on for 60 to 72 months. In addition to paying your monthly installments to pay off the car, you are also paying interest on that loan.
If you have a 3% APR, you could be paying an additional $1,500-$2000, depending on the length of the loan. By paying off your loan faster, you will pay less interest and save money in the long run.
Do you need to go out for lunch and coffee every day or can you make it at home? Do you need the 500 channels in your cable subscription? If you can cut anything out, consider doing so and you can get that pesky car loan out of the way faster.
If the idea of paying down your loan faster is the goal, and you have some time available during the week, consider using your car to earn more money than you can put towards your debt.
These days, ride-sharing apps and food delivery companies are very popular, and you can earn extra money and get good hours driving or delivering for a company like Uber. You could even pick up a person on your way to or from work to kill two birds with one stone.
If you drive a lot, you will see wear and tear on your vehicle and that can’t be avoided. However, you can make expensive mechanic visits few and far between by practicing preventive maintenance on your own.
If you are not a “car person,” you can use websites like YouTube to get tutorials on standard tasks like changing oil, windshield wipers, and refilling your fluids. By doing these tasks at home, you could be saving hundreds of dollars per year.
When you go to a mechanic, you are paying for the parts and the service. So when you need to do something as simple as replacing a battery, you can save money by buying it but replacing it yourself. A battery typically costs around $100, and the cost to have a mechanic do it is often an additional $100.
The money you save on installation can be put away in case you have a more costly repair in the future.
Even if you can’t do it yourself, you should at least stop by a mechanic every 5,000 miles to get your recommended oil change.
Most establishments will run tests while they work to determine if anything else on your car needs to be replaced, like timing belts or burned-out tail lights.
It is more cost-effective to take care of these issues now so it isn’t more costly down the road when the problem gets worse.
It is easy to make a mistake during these more complex fixes, and the damage you cause could cost more than what it would be just to have it repaired normally.
Be Smart About Usage
You can save a lot of money on your daily travel by being educated on the factors that influence gas mileage and vehicle longevity.
If you prefer to drive rather than fly, this is especially important during long road trips that will rack up the miles on your car and hit your wallet with necessary expenses. For instance, if you are not careful, your gas budget can quickly get out of hand.
To save money in this regard, do your research to find where the most affordable gas stations are located, even if you are not near your home.
There are many mobile applications available, such as Gas Buddy and Waze, that can determine your location of the most cost-friendly gas stations in the area.
If you travel a lot, consider getting rewarded for the money you spend on gas by finding a credit card that offers extra perks and cashback when you buy fuel. Use that card at the pump and you will save even more during each refill.
If you want to save money on fuel then increasing your gas mileage is a must. There are many tricks that you can use to save money in this regard. When driving, avoid excessive speeds and don’t go overboard on the breaks. Instead, just keep a safe distance behind the car in front of you.
Other tips include reducing the weight your vehicle is holding in the truck or bed, avoiding excessive use of the air conditioner, and keeping the windows closed when driving. Also, every other time you stop for gas, check your tires to ensure they are at the proper PSI (pounds per square inch), as tires with less air will drag down your gas mileage.
While it may never be free, the costs associated with owning and driving a car can be reduced greatly with smart decisions and preventive maintenance. Take a few minutes to think about how you can adjust your money habits and you will have more money saved than spent.