After housing, cars are their biggest expense that most Americans face. Fuel, auto insurance, and maintenance costs, not to mention the price of the vehicle itself, can all add up pretty quickly.
Studies show that the average vehicle costs $10,742 per year to own and operate. That’s about a fifth of the average US salary.
So what can you do to lower your car expenses? The key is to adopt multiple cost saving strategies at once. Here are 7 you may could start today:
1. Find a Good Car Deal
Saving on car expenses starts with getting the right car. Unlike real estate, cars almost always depreciate in value. In fact, a vehicle loses about 25% of its value as soon as you drive it off the lot.
Buy a used car if possible. That way, you’ve let someone else take the initial hit of depreciation for you. The longer you hold onto your car, the more you’ll save, too. Constantly trading in for a new one will lose you money fast. And keep in mind that not all vehicles depreciate at the same rate. Some will hold their resale value better than others.
Also consider fuel efficiency. Smaller cars will get better gas mileage than larger ones. Furthermore, manual transmissions get about 5 miles per gallon more than automatics. And finally, though they tend to be more expensive, electric vehicles (EVs) and hybrid vehicles get the best gas mileage there is since they run on electricity.
2. Don’t Get Unnecessary Dealer Add-Ons
Anytime you buy a vehicle, the dealer will try to sell you on extra accessories that you don’t really need, like tinted windows, nitrogen tires, and upgraded floor mats. But not giving in could save you a lot.
Also be wary of buying extended warranties and extra insurances. These include warranties for key, windshield, tire, and dent protection, along with credit and GAP insurances. For the most part, you’ll be better off setting aside some money for emergencies and getting insurance through your employer or private insurance.
3. Get Better Financing
When possible, pay for your car in full and in cash. That way, you don’t have to spend extra money on paying interest on a loan.
If you do get a car loan, make sure to shop around for the best rates. Go short-term over long-term. And explore refinancing your car loan as soon as any of your financial circumstances change – like if your income or credit increases significantly.
Whatever you do, buy within your budget and don’t overpay.
4. Perform Regular Maintenance
Preventative maintenance is almost always cheaper than repairs. So keep a maintenance schedule to remind you to look under the hood every once in a while.
Check the oil and other fluid levels regularly. You can do simple maintenance tasks yourself, like replacing air filters or inflating your tires. Easy things like these will not only save you from paying someone else to do them but boost your car’s fuel efficiency.
Make sure to change your oil and oil filter regularly. Many say to do it every 3,000 miles. But the truth is that most cars these days don’t need oil changes that frequently. So it’s best to read the owner’s manual and see exactly how often your car needs it and what type of oil to get. This will save your engine in the long run.
Of course, some things you’ll need to take to a mechanic to check and fix. So find a trustworthy mechanic who can verify that your car is running properly by checking the wheel alignment and emissions and so on.
It’s better to invest in regular tune-ups upfront because they can extend the overall life of your car.
5. Cut Down on Gas Costs
Gas is one of the biggest car expenses. To reduce it, shop around for the best prices. For example, use apps like GasBuddy to find the cheapest gas stations around.
Also, buy regular gas. Premium high-octane gas is rarely necessary or beneficial. And try not to top off the tank when pumping gas. If you do, you could later lose excess fuel from parking on an incline or in the hot sun.
Another way to save on gas is to drive more efficiently to improve your gas mileage. Here are a few things you can do:
- Don’t let your engine idle. If you are waiting in the car for someone, turn the engine off.
- Avoid accelerating too fast or coming to sudden stops. This will burn more gas than if you accelerate and decelerate slowly. Your gas mileage also starts to fall off once you go over 50 MPH.
- Use cruise control. A constant speed on the highway improves your fuel efficiency.
- Avoid carrying unnecessary weight. The heavier your car, the more gas it will take to drive. But if you have a lot to transport, know that rooftop cargo carriers will increase the area of your car and cause more air resistance. Instead, use rear-mounted storage options which avoid this problem.
- Limit your air conditioning use. Using the AC lowers fuel efficiency. But that doesn’t mean you should keep your vehicle uncomfortably hot either.
6. Drive Smart
On top of driving in more fuel efficient ways, never drink and drive. DUI tickets can cost over 1,000 dollars and even more without a proper criminal defense. Plus, you could wreck or total your car – not to mention injure or even kill yourself and others.
Of course, just driving less will cut your car expenses, too. If you carpool to work or ride your bike or walk, you can save on a lot of gas and regular car wear. These days, it’s also easier than ever to work from home. So the opportunities are there. Plus, if you significantly reduce how much you drive, you may even be able to lower your car insurance premiums, which leads us to our final tip.
7. Lower Your Car Insurance
You’ve probably heard countless ads about switching your car insurance. But switching really can save you money in the long run. So shop around for the best rates.
Try bundling your auto insurance with home insurance. A lot of auto insurance companies offer both, and if you bundle them, they’ll likely give you a package deal.
Ask for other discounts, too. If you have kids on your policy, for example, you may be able to get a discount if they get good grades in school.
Perhaps the easiest way to lower your premiums is to raise your deductible. Of course, this means you’ll have to pay more out of pocket if you ever do have an accident. Consider also dropping your collision coverage. If your car is over 5 years old or worth less than $1,000, it may not be worth the premiums to cover.
Finally, to prevent getting your premiums raised, avoid speeding tickets and accidents and wait to add teenagers to your policy since they’re considered more reckless drivers.
Well, there you have it! Start applying some of these strategies today and you could start saving a lot of money in no time.