Buying a new car is thrilling but expensive. Besides your monthly car payments, you must also budget for insurance, fuel, and routine maintenance. You might struggle to live below your means if you don’t prepare for these added costs.
Research extensively before you buy a new car. Find out the expenses you might incur and choose a car within your budget. Building car expenses into your budget can help make owning a car less painful.
How to Save Money on Car Expenses
The most effective way to save money on car expenses is to get a credit counsellor to advise you on expenses you need to account for. Getting durable car parts like Advanta Tires can also help you reduce routine maintenance costs.
Here are a few tips to save money on car expenses.
1. Lower Your Car Insurance
There are several ways to save money on your car insurance. For instance, if you have homeowner’s insurance, ask your current company for a discount on your car insurance. The average driver pays $1,556 per year for car insurance, so reducing your insurance costs can save you a significant sum.
Shopping around and asking for the best offers is also wise since car insurance prices vary based on the company. After settling for a company, request higher deductibles to save on your coverage cost.
2. Drive Less Often
You might need a car to drive to and back from work, but what about the unnecessary trips around town? The US Department of Transportation says that almost 60% of all car trips are six miles or less.
When taking short trips, it’s better to walk to reduce the fuel you use. It reduces your car’s wear and tear and keeps your mileage. With a lower mileage, insurance providers might offer you better deals.
3. Ensure Routine Maintenance
Garage tours are expensive, and the best way to cut these expenses is by reducing the frequency of repairs. Checking the engine regularly and ensuring routine maintenance are the most effective ways to reduce vehicle repairs.
There’s no comprehensive list of routine maintenance practices to help you avoid car repairs. However, checking your engine oil, oil filters, coolants, brake fluid, brake pad checking, and external lights can help reduce unnecessary breakdowns.
4. Sell or Trade Your Current Car
Are you considering upgrading your car? There’s no need to pay car insurance for two vehicles when you only need one. You can trade in or sell your car privately and then buy the one you desire. This can also help you save on maintenance costs.
Most owners prefer to trade in their cars at the dealership shop. It’s convenient and free and your old vehicle can significantly reduce your downpayment. Selling privately can be rewarding, but time-consuming. You’ll negotiate your price with each buyer and might sell it at market price.
5. Save Money with Car Loans
If you bought your car through a loan, talk with your bank manager to help with your monthly payment. You can refinance your loan to a lower interest rate or term and pay less monthly.
The bank can allow you to defer a few monthly payments to reduce your financial strain and get back on your feet. However, your loan interest may continue to accrue during that period, and your overall balance may increase.
6. Make Extra Payments
Getting ahead of your monthly payments can help you reduce your overall balance and skip payments. Some lenders may apply extra payments only to interest, so be sure to request your payments to go directly to the principal.
Use your extra earnings, gifts money, and allowances to make extra payments and stay ahead. You don’t need to send in the funds simultaneously, you can deposit small amounts each month to reduce your financial strain.
Conclusion
Vehicles come with added costs like car insurance, fuel, and maintenance. You might struggle to make repayments if you don’t budget well.
Reducing your car expenses can help you save money and make repayments faster. Follow the above tips to save money on your trips. If you still struggle to reduce your budget, consult a credit counsellor to find out how to reduce your bills.
