Car ownership can be costly. The annual car ownership costs rose from $9,666 in 2021 to $10,728 in 2022. These expenses include fuel, insurance, purchase cost and financing, parking fees, repairs, maintenance, registration and license, and depreciation. Finding ways to slash your vehicle expenses can help save you some money. Here are six ways to reduce your car expenses.
Potential Expense Reduction Strategies
|Car loan payment||$300||Monthly||Refinance or pay off early|
|Insurance premium||$100||Monthly||Shop around for better rates|
|Gasoline||$80||Weekly||Drive less or use public transportation|
|Maintenance||$50||Monthly||Do some repairs yourself or find cheaper service|
|Parking fee||$20||Monthly||Find free or cheaper parking spots|
|Tolls||$10||Monthly||Avoid toll roads or use carpool lanes|
1. Prioritize Fuel Efficiency
Aggressive driving, including rapid braking and acceleration, and speeding, may reduce gas mileage at highway speeds by approximately 15% to 30% and in stop-and-go traffic by around 10% to 40%. Driving slowly and avoiding aggressive driving is not only safe for you and other road users but can also help save money at the pump. While different vehicles attain their optimal fuel economy at varying speeds, observing speed limits can increase fuel efficiency.
Carrying cargo on your vehicle’s roof raises wind resistance and reduces fuel economy. Avoiding this can help boost fuel economy. Also, don’t keep unnecessary stuff in your car because the excess weight may increase your MPG (miles per gallon). Turn off the engine to save fuel when your vehicle isn’t parked. You can also use cruise control on highways to maintain a constant speed.
2. Reduce Car Insurance Costs
A car insurance rates analysis found that full vehicle insurance averages $2,014 per annum. While this may vary from one car to another, finding ways to lower car insurance costs can help save money. Insurance costs differ from provider to provider. So, shopping around can help you find favorable rates. Get quotes from at least three insurance companies, compare their rates, and read reviews to determine what other consumers say about them.
Auto insurance premiums are partly based on a vehicle’s cost, repair costs, safety records, and the possibility of theft. So, compare insurance costs before purchasing a vehicle to find a car with affordable insurance. Buying two or more insurance types from the same provider may earn you lower rates. Maintaining a good credit history and taking a defensive driving course can also help lower car insurance costs.
3. Schedule Regular Car Maintenance
Regular maintenance is an essential element in a vehicle’s health. It keeps your car running longer, eliminating the need for a financial commitment to buy a new one. It also increases fuel efficiency. When vehicle problems aren’t caught on time, they escalate and lead to costly part repairs and replacements.
With regular car maintenance, it’s easy to catch car issues early and get them addressed immediately to avoid high-cost fixes in the future. Breakdowns often result in expensive towing and repair services. Sticking to a regular car maintenance routine helps lower the risk of breakdowns or malfunctions, saving money.
4. Start Carpooling
Carpooling is an excellent way to save money on gas while saving the environment by minimizing greenhouse gas emissions. When you carpool, you may qualify for reduced coverage and low-mileage discounts, lowering your car insurance costs. Carpooling lets you share ride costs among fellow carpoolers, or you can alternate the cars you’re using between all of you. This evenly distributes vehicle wear and tear and expenses. Carpooling reduces the miles driven daily, saving on maintenance and fuel. You can start carpooling with colleagues or friends as a regular arrangement, including going to work or whenever needed.
5. Refinance Your Car Loan
If you’ve taken an auto loan to buy your car, refinancing that loan can help lower your financial burden. If your credit was poor or you had none when you purchased your vehicle and have since improved your rating, you may be eligible for a lower interest rate. A lower interest rate loan can help reduce your monthly car payments. And while this may extend the loan term, it ensures you don’t fall behind on payments, especially when facing a financial crisis. It also saves you money to cater to other financial obligations.
Additionally, if you had accepted a dealership’s higher rate than you might have been eligible for elsewhere, refinancing can help you reduce it. While auto loan refinancing can be helpful, it should be done at the right time. Refinancing would be a good option if:
- Interest rates have since gone down since you took your first car loan
- You’re in a better financial situation
- Your first offer wasn’t the best
- You have difficulties keeping up with monthly bills
6. Consider a Monthly Parking Package
Finding a secure parking spot, especially for daily car users, can be difficult. If you don’t have a designated parking area, you might have to drive for several hours to find a safe and appropriate parking spot, leading to more fuel usage. Once you find a parking marketplace, avoid daily parking packages because they can be expensive. Monthly parking plans have cheaper rates, reducing car expenses. Also, parking marketplaces usually offer safe parking areas, preventing the costs associated with unsafe parking spots.
Vehicle expenses can quickly get out of hand. However, implementing these tips can help lower your car expenses.