Cutting Car Costs
Without a doubt Americans love their cars. The U.S. has the highest rate of car ownership in the world, with 779 vehicles for every 1,000 individuals — that’s more the 2 vehicles per household on average. As a result Americans also spend a large amount of money on automotive expenses. A study released in 2011 showed roughly 2 hours of work by an average American goes directly to pay car costs—that means of your 8-hour workday, the pay for ¼ of that time is used on your car. This makes cutting car costs a prime candidate for improving your finances.
Car expenses are also a big offender when it comes to putting people in debt. Besides unemployment or unexpected healthcare costs, purchasing a car that’s beyond your means is one of the number on reasons people give for facing financial trouble. If you’ve gotten into trouble with car costs that are simply too high for your budget, please call .
Tip #1: Keep your car payments affordable
The first place to look when you want to cut car costs is at your car, itself. Consider these tips to help cut car costs to ensure you’re driving within the lines of your budget:
- Buy within your budget. With all the sleek designs and the slick marketing you see today, it’s no wonder so many people spend more than they should on their cars, but overspending for a car you don’t need is a really easy way to end up in debt. Always calculate your monthly car payments before you buy to ensure they’re within a good range for your monthly finances.
- Downsize when possible. If you bought beyond your means or your transportation needs have changed, downsize to a smaller and/or more affordable car. Pickups and SUVs typically cost more in gas, so keeping one of these autos when you don’t need the hauling or towing capacity is simply wasting money. The same is true if you had a people mover for all the kids, but they’re either grown or out of your house.
- Refinance for a better deal. Particularly if you’ve made all your payments on time and have a good credit score, you may be able to refinance your car loan to get a better rate and a reduced monthly payment. Also make sure to check your credit report before you buy to make sure any discrepancies aren’t affecting your credit rating.
Tip #2: Don’t overpay for insurance
A survey by a major automotive insurance company found 1 in 3 drivers doesn’t know the cost of their insurance. As you can see from constant commercials and advertising, you can save hundreds of dollars on car insurance costs by having the right policy. The important thing is to make sure you’re covered for what you need and paying only as much as you need to:
- Pay for what you need. Don’t scrimp on coverage, as this can lead to big expenses if you have an accident and aren’t covered for something. However, you also don’t want to pay for services you don’t need. For instance, if your car is old and not worth very much in resale value, you may not need collision coverage because you’re not going to really get anything back even with the coverage if you have a wreck.
- Shop around. Like your health insurance, car insurance is something you should shop around for on a regular basis. Look online, talk to friends and family, and compare rates often to make sure you have the best deal for the service you need.
- Reduce cost with good driving habits. Good drivers spend less on insurance. Insurance rates can go up as much as 25% just for speeding tickets. Driving safe makes you less likely to get in a costly accident, too.
Tip #3: Get the most out of gas costs
Gas prices are constantly fluctuating for any number of reasons—from weather to political upheaval. While you can’t fix gas prices, you can improve your expenses on gas by using the following money-saving tips:
- Check your tires. Driving with the appropriate amount of air in your tires improves gas mileage, which in turn reduces fuel costs. Check the manufacturer’s recommendation for the tire pressure for your specific car, rather than what’s indicated on the tire.
- Don’t waste gas while driving. From revving your engine and wasting gas on RPMs to driving around with heavy clutter in your trunk, often you can improve gas mileage to reduce fuel costs by driving slower, changing gears at lower RPMs, emptying your car of clutter, and keeping the windows rolled up to reduce drag.
- Open windows versus A/C. Both air conditioning and keeping your windows open will reduce your gas mileage, but going to work drenched in sweat really isn’t an option either. When you are driving faster, like on the highway, keeping the windows up and using the A/C for cooling is more cost efficient; however, in city driving at lower speeds is usually more cost efficient with the windows down and the A/C off.
- Don’t waste gas looking for good gas prices. People who want to save often spend miles worth of gas either driving around to find the best price or out of their way to get it. Wasting gas to get the best price may actually be costing you more.
Tip #4: Reduce repair costs
Getting proper regular maintenance on your car can save you big by avoiding unnecessary breakdowns and issues as your car gets older. Check your owner’s manual to find the recommended maintenance schedule for your car and stick to it. You will improve your fuel efficiency, reduce repair costs, make your car last longer, and even get a better resale value when you decide to purchase something new.
In addition, make sure you’re not overpaying for repairs or service. Always check the Better Business Bureau to make sure you take your car to a reputable repair shops and check Consumer Reports to see where you can find the best value in both dealership repair and independent repair shop.