Owning a car can make life more convenient, but it can be a big expense. According to AAA, the average cost of owning a car in 2019 was a whopping $9,282 a year. For families struggling to make ends meet, that extra $773.50 a month per car can stretch an already thin budget even thinner. The good news is, there are ways to reduce this amount, potentially saving you hundreds of dollars a month. This car cost calculator will tell you how much you are already spending, and the tips below can help you bring that number down.
1. Lower Your Depreciation
A lot of the increase in the yearly average of owning a car is due to the rise in the finance costs of purchasing a new car. Vehicles lose value over time, especially in the first two years. In fact, new cars lose about 25% of their value when you drive them off the lot. The best way to reduce this financial loss is to purchase a used car rather than a new one. If you are buying a new car, you can lower your depreciation loss by purchasing less expensive cars, looking for a car that has good resale value, and avoiding purchasing large vans or trucks unless you actually need one.
2. Minimize Fuel Costs
Fuel costs can be a large part of the necessary expense of owning a car. These costs can vary depending on the current fuel prices, where you live, and how much you drive. The type of car you buy makes a significant difference, as vehicles which require premium fuel can increase your costs, while those with good gas mileage, such as hybrids or PZEVs (Partial Zero Emission Vehicles) can reduce them drastically. Keeping your car well-maintained with the proper oil type and tire pressure will also keep costs lower, as will searching for the least expensive gas station on your route by using apps like GasBuddy.
How you drive can affect how much you spend as well. Driving around with extra weight, such as having a roof rack or a full trunk, will increase the amount of fuel you use. Other things that increase your fuel usage are speeding, fast acceleration, using air conditioning, and idling for long periods. Your fuel will go farther if you can avoid these things. In addition, using cruise control can increase your mileage, so try to use it more often.
3. Reduce Repair Costs
Keeping up on regular maintenance may increase your costs in the short term, but it can save you significant amounts of money in the long term. See the owner’s manual for your vehicle to see what scheduled maintenance is recommended, and keep a copy in your records. Reviewing your owner’s manual can also prevent you from wasting money on unnecessary maintenance. For example, most modern cars don’t need an oil change every 3,000 miles; in fact, some can go up to 7,500 miles before it is recommended.
When taking your car to a mechanic, there are ways you can reduce your final bill. First, it is wise to research reputable mechanics ahead of time via online reviews or recommendations from friends, family, or coworkers. Researching the average price of the repair that is needed can also help prevent you from being overcharged. In general, independent mechanics tend to have lower prices than dealerships, as do non-OEM parts compared to those made by the vehicle manufacturer. If you are able to, doing simple repairs yourself can also save on labor costs.
4. Keep Your Insurance Premium Low
Insurance costs can vary widely, so it is always smart to shop around. Ask your agent what discounts they offer, and take advantage of as many as you can. Many insurance companies offer various discounts for things such as teenage drivers having good GPAs, having a safe driving history, or having anti-lock brakes or an anti-theft device on your vehicle. Choosing a higher deductible plan can also keep your monthly costs lower, as can forgoing comprehensive coverage if you have an older vehicle. Finally, it is important to drive safely, as being found at-fault in a car accident can have many devastating and expensive consequences, one of them being causing your insurance premium to skyrocket.
5. Use a Credit Card For Car Rentals
It’s important to have insurance when renting a car in case of an accident or other damage, but not everyone is aware that many credit cards offer free insurance when you use that card to rent a car in your name. This can save you from purchasing additional insurance from the rental car company itself.
Keep in mind though, that most credit card companies only offer collision and comprehensive coverage, and only as secondary coverage. This means, you will have to file a claim with your primary insurance company first (which could increase your premium), and the card company will cover what the primary insurer did not, such as deductibles or towing fees. In addition, there are usually restrictions and exclusions on what they will cover, so be sure to know the specifics for your card before using it for this. If you rent cars often, it may be worth it to look for a card that offers primary rental car insurance.
Do You Really Need a Car?
For some people, owning a car is a necessity, for others, it is a convenience. If you live somewhere that has good public transportation, or live close enough to your job that you could walk or bike to work, you may be able to forgo the expense of owning a car altogether. Even if you do own a car, using other means of transportation when you can will reduce your fuel costs and the frequency of maintenance. However, many have no choice but to rely on their cars as their primary means of transportation. If that is you, then you will benefit the most from the tips above for cutting your vehicle expenses.