Owning a car is not cheap. A car is the second most expensive item an individual owns (a house being the first). You have to consider your monthly payments, insurance, gas, and maintenance. The unfortunate thing is that 99% of cars depreciate in value ( antiques are the 1% that do not). So a car is not an investment that you can make money from.
You can follow the tips below so that you can keep your costs to a minimal when owning a car.
As already mentioned, cars depreciate in value. Once you drive your car off the lot it has already lost 25% of its value. Sad. Right? Here are some ways to reduce the depreciation costs:
- Buy a car that serves the function of what you need. If you don’t need a large SUV, do not buy one. It will eat up fuel and cost you more.
- Inexpensive cars will depreciate less.
- Purchase a car that is coming off of its lease. This is a good idea because the car depreciation is greatest in the beginning.
- Different cars depreciate in different ways. Do some research and see which one’s depreciate less.
Gas is very expensive. The average amount spent on gas a year is approximately $1,500. Here is how you can keep your gas costs down.
- Purchase a car that uses regular gas not premium. Premium fuel will cost you more.
- Drive the speed limit! This will help you save on gas. Every 5mp you drive over 50mph adds 18 cents per gallon to your gas bill.
- Do not carry extra weight in your car. Carrying an extra 100 pounds affects your fuel efficiency by 1%.
- Look around for the cheapest gas prices in your area.
- Don’t just sit with your car on. This burns gas, which costs money.
- Setting your car to cruise control on the highway can save money.
- Limit your heat and air conditioning. This can affect your fuel efficiency by about 25%.
- Make sure your tires are properly inflated.
- Don’t slam on the gas or the brakes. This can cost an extra $1/gallon.
- Purchase a car with a good fuel rating
Car insurance is costly.
- Think about switching to a higher deductible. With a higher deductible, you will have to pay more out of pocket in case of a claim.
- AAA recommends searching for a new car insurance every year. This can help you find a cheaper option that can help you save a lot of money.
- Don’t feel rushed to get your teen in the drivers seat. Insurance for teenagers is expensive. Adding a teenager can increase your insurance by 80%-90%. Some insurance companies have promotions for students with good grades. Keep an eye out for such promotions.
- Check to see if the insurance company offers discounts for drivers with anti-lock brakes, organization affiliations,anti-theft devices, safety training, safe driving history.
Make sure to check the cars manual on when to take it in for maintenance.
- Your car usually tells you when to change your oil. These car indicators are very accurate.
- Try to do the simple maintenance yourself. These include replacing air filters, filling up the tires and rotating the tires.
- Do not do unnecessary repairs.
It is a good idea to shop around for the best financing. You can compare the dealers financing with a bank or credit union. You can also go to the dealership with a pre-approved loan and see if their financing can top the one you brought in. You can also look into refinancing your car if your credit has improved.
As you know, owning a car is expensive. However, there are ways to decrease the costs owning a car. It is a great idea to apply some of the tips above to save money on your car.