There are some ways to save money on these expenses though! Here are five tips for saving money on your car expenses:
1 - Understand Depreciation
You’ve probably heard people say “a new car loses value as soon as you drive it off the lot.” But what does this mean? If you have your eye on a new car, do some Googling.
Place the manufacturers name into the search bar and find an identical vehicle that is few years older to see how much it will cost you. You’ll notice that many cars are much cheaper even after about one year. For example I just looked up a Toyota Camry LE Model.
Buy Less Expense New Car – You could save money on your car by buying a less expensive vehicle. A similar model with fewer seat can be comparable in terms of performance and gas mileage, but will depreciate slower than an SUV or other roomier model. We purchased a Nissan Leaf for the Kim family instead of going with an overly hyped Tesla.
Buy Used Car – One of the best ways to save on your vehicle expenses is to buy a newer used car. The largest depreciation happens in the first two-to-four years so if you can avoid that period, you’ll be able to save more money on your purchase. Most often, you will find that a car which is only 2 or 3 years old is nearly as good as new without the expensive new vehicle price tag.
2 - Be Fuel Conscious
The average American driver spends about $1,500 a year on fuel. If you drive more than the average American, this quickly adds up. There are a number of things you can do to keep your fuel costs down.
Buy a car with good gas mileage –There are many models that achieve at least 40 miles per gallon, and some even go as far as 50 miles per gallon. This will save you money on your monthly fuel costs when compared to the average car which is about 23 mpg. The Kim family drove a Toyota Prius for many years. It still surprises me every time I fill it up – with just one tank of gas, I can drive 500 miles!
Get a car model that uses regular fuel – Some brands, especially turbocharged vehicles, recommend or require premium fuel which is more expensive at the pump. Why go through the trouble!
Slow down and drive less – Driving slower can help you save money in two ways: by reducing the likelihood of speeding tickets or losing your license, and it will also help conserve gas.
Don’t drive aggressively – When driving, avoid accelerating aggressively and braking abruptly as this will result in greater fuel consumption.
Don’t carry extra weight – Carrying too many items in your car can significantly impact fuel efficiency. Regularly clear out the items in your car’s trunk and only keep what you need while driving.
3 - Regular Maintenance
Keep your car in the best running condition possible by performing all recommended maintenance. Cars are now made to last 10+ years. Most models can go a decade without any work if maintained properly.
Perform routine maintenance. Regularly follow the service checkups listed in your owner’s manual and keep a copy of the schedule with you for easy reference. Most general tasks should be done around every 5,000 miles (oil changes, tire rotations etc.).
Find a good mechanic. You can save money by using yelp and word-of-mouth recommendations to find a good local mechanic specializing in your car. While taking the car to the dealership may have some advantages, the cost will be much more. The trick I use is to get a maintenance assessment from the dealership and take the report to a private mechanic for service that costs much less.
Research repair costs. If you know what’s wrong with your car, use sites such as CarMD.com to estimate how much it will cost to fix the problem before discussing a final price with your mechanic. If the estimated charge seems high ask if some of the work could be done at a later date for less money and decide from there what course of action you want to take next.
4 - Review Your Insurance Policy
The auto industry is highly competitive, which is good for car buyers. Still, you should re-examine your policy at least once a year to ensure it still meets your needs. Here are a few ways to save on car insurance:
Shop Around – Car insurance rates can vary widely among different companies. When you’re looking for quotes, it pays to shop around and compare costs. Even though I’ve been with the same car insurance company for 20 years, I research other quotes at least once a year to weigh the cost of switching.
Increase Your Deductible – One trick that can help lower your annual costs is to raise the deductible to the maximum which is most often $1,000. If you are a safe driver, you rarely need to pay the deductible on your auto insurance. In the last 10 years, I think I only paid the minimum deductible of $1,000 one time while increasing my deductible has saved me much more than that.
Check All Available Discounts – Review your insurance policy and identify any discounts you qualify for. Be sure to take advantage of good driver discounts, savings for homeowners or renters, loyalty discount such as being a teacher or engineer, and more.
Be a Good Driver – According to the DMV, drivers with violations or tickets won’t get the lower rates. Clean up your records and then make sure your insurance company registers it on your behalf.
5 - Carpool
The average daily commute for Americans is about 30 minutes. But carpooling with just one other passenger can reduce the time it takes you to get to school, work, or anyplace else by half and save money as well. You will not only save on gas because the cost of fuel between two or more people, you’ll also save on maintenance and wear-and-tear costs.
When carpooling you can also use the High-Occupancy Vehicle (HOV) lane which is usually much less congested than regular lanes allowing you a quicker and more enjoyable commute.
The Kim couple carpooled to work for many years. It not only was great for saving money but as a busy parents with young children, it allowed us opportunities to catch up and spend quality time together. We often times joked that our only date night happened at 6 in the morning when we were driving to work together.
So for your busy parents out there… if you are struggling to find quality alone time together, think about carpooling. It could save your marriage.
Bonus Tip! - Drive Your Car Until It Dies
We live in a culture where it is common to trade in cars after two years. Americans’ affinity for cars makes feels like we need to buy a new one every few years. The auto industry’s constant advertising campaign tells us that we must have a new car every few years or so. We’re always tempted to buy a whole new thing when something is old and we want it to be the latest model.
If you do this, it is an extremely costly mistake. Most cars last for several years if properly maintained. Save money by driving your car as long as the safety will allow it! You will save thousands of dollars over the course of its lifetime if you adhere to this principle.