Buying a car is an entirely different ball game from keeping and maintaining one. For those who don’t own homes, it is the most expensive thing they will own; second to those who own properties. The price tag is just the start. Once you drive it off the lot, the bills and upkeep will keep piling up.
8 Ways to Significantly Reduce Car Ownership Costs
1. Stick to what you’re driving a bit longer.
Obviously, if you already own a car and it is still in good condition, you can cut down on an unnecessary expense by not buying a new one, whether brand new or secondhand. The cost of depreciation alone is already a waste of your hard-earned money, especially in the first two years of ownership.
2. Consider buying a pre-owned car.
Considering the first tip above, if you’re looking at replacing your car with a more cost-effective unit (or if you’re shopping for your first car), consider going to one of those used autos establishments.
The good thing about buying used cars — other than it is obviously a lot cheaper compared to a brand-new unit — is the previous owner has already paid for the depreciation cost, which is about 25% to 60% of its value, depending on how long the previous owner had it.
3. Go over your insurance needs and reassess them.
It helps if you take a moment to evaluate your finances along with your car’s insurance. If you have enough savings to cover for incidental expenses (such as accidents) and your finances are in order, then consider switching to a higher deductible. Do some shopping and look for the best insurance rates possible that’s fit for your needs.
4. Buy aftermarket accessories and products.
In most cases, aftermarket products and accessories, such as a GPS system, work just as well, if not somewhat better, than those that are offered by car dealerships. However, it is important to note that if you are buying aftermarket structural parts, you have to make sure these are CAPA-certified.
5. Don’t go beyond your means.
Another pretty obvious tip, do not spend money you don’t have. Buy only what you can afford. A good rule of thumb, according to Dave Ramsey, is to not spend over 50% of your annual salary on a car.
6. Learn how to do some basic car maintenance and troubleshooting.
Learning to do basic car repairs and maintenance saves you thousands in the long run. For instance, if you know how to change your car’s engine oil, it will only cost you around $10 to $25 to buy the oil and filter, as opposed to having it serviced at a shop for anywhere between $30 to $100.
7. Do your due diligence before seeing a dealer.
Anything that involves a major financial decision has to be thoroughly studied and assessed. A car purchase is one of those. Before going to a dealer, you have to do your own research about the car model you want, the insurance policies involved, the best rates available, and other similar pieces of information so you get more bang for your buck.
8. Lower your fuel consumption.
There are several ways to reduce your fuel consumption, from regularly checking tire pressure to making slight adjustments to driving habits. It also helps to go over your schedule for the day and see how to go about spending the least amount of time on the road.
Owning a car is costly, especially during these times. You must learn to be frugal when it comes to your car expenses. Every penny you save from it can either go to building your savings or be allocated for other important expenses.