For most Americans, a car is the second priciest household expense after home ownership. Buying a new car not only puts a dent in your finances, but the running costs that come after the initial purchase can run high as well. These costs include auto insurance premiums, gas, scheduled maintenance, and repair.
Luckily, you can adopt several cost-saving measures to ease the cost of maintaining a car. For example, it’s always a good idea to do some research and read a CarShield review to decide whether an extended warranty is a cost-effective solution for your high-mileage vehicle.
Here are other tips to help you reduce the cost of your car upkeep:
Shop Around for Car Insurance
Having sufficient auto coverage is necessary, especially with unforeseen repairs and accidents. But on the flip side, auto insurance adds to the expense of car ownership. The good news is that premiums vary from one auto insurer to another based on vehicle age, model, postcode, driving history, and other factors. So you can always shop around to find a plan that works best for you.
According to a J.D Power study, only about one-third of auto insurance policyholders shop around annually. And the one-third who shop around end up saving an average of $365 per year.
Ideally, you should shop around for a new policy at least every six months. Ask for a car insurance quote from at least three auto insurers to find competitive rates. Many auto insurance providers are actually open to renegotiating your rate to factor in your present location, driving record, depreciation, and marital status.
Raise Your Deductible
A deductible is an amount that you pay out of pocket to cover an insured loss. It's a way in which you and your insurer share the risk. Let's say you have a $600 deductible on your collision coverage, and another car hits you, resulting in your car sustaining damage worth $2,000. In this case, you're required to pay off your $600 deductible while your insurer covers the remaining $1,400.
Essentially, the higher you set your deductible, the lower your monthly premiums will be. By increasing your deductible, you're technically choosing to cover a huge part of your policy risk. This means that your insurer shoulders less of the risk if you make a claim, translating to a lower bill for you each month.
However, you need to note that you will pay the deductible out of pocket if an accident happens. So you need to make sure that you can easily raise the deductible amount in case of an emergency.
Be Diligent About Car Maintenance
Car problems such as worn-out parts, minor leaks, and clogged filters are inevitable. However, early detection means that you can fix them before they exacerbate into costly headaches. Here's how you can save on your car's maintenance:
Regular tune-ups
Regular tune-ups at your local service shop can improve fuel economy by 4 percent. The cost of a tune-up is especially cheaper if you factor in the cost savings from reduced breakdowns.
Oil and filter change
Oil lubricates the engine's internal components to avoid potential friction between the moving parts. While the oil filter sieves engine oil's dirt, carbon deposits, and combustion contaminants. So if you regularly change your car's engine oil and oil filter, you will realize savings on engine wear and repairs.
Traditionally, 3000 miles was the recommended threshold oil or oil and filter change. Today, car makers recommend intervals of 7,500 miles or even more. Always stick to your owner's manual for oil and oil filter changes.
Replace your air filter
A dirty or clogged air filter reduces the engine's life and fuel economy by up to 10 percent. Most vehicles need a new filter every year or after 12,000 miles. But you can extend the life of your existing one by checking it every month. You can blast it with compressed air to eliminate dirt and debris.
Check your tire pressure regularly
A complete set of tires doesn't come cheap. So it pays to look after your existing car tires to avoid forking out money for expensive new rubber. Ideally, you should check the pressure and condition of your tires at least every fortnight. Adjust them to the correct PSI, as the car's manual states. Proper tire balancing every year may also add thousands of miles to your car tires.
Watch Your Car’s Fuel Consumption
Just like maintenance, fuel costs are an inevitable part of running a car. The more miles you cover, the higher your fuel expenses. Here are ways to help you cut down on your fuel consumption:
- Don't overfill the tank: Many car owners are guilty of topping off their fuel tanks to avoid constant trips to the pump. But this could mean wasting money at the pump. Why? Gasoline requires room to expand. So when you continue to top off after the first click of the gas pump, the rest of the gas you're pumping isn't entering your car tank. Instead, it's drawn into the vapor line and returns to the station's fuel tanks. So you're just putting your money down the drain.
- Find the cheapest fuel pumps: Filling up at more affordable gas stations can help you save hundreds of dollars annually, especially if you're constantly on the road. Today, there are many free apps that show gas prices at local stations. Depending on your location, you can check out the pump stations with the most affordable diesel and unleaded per-liter prices.
- Drive sensibly: Hard braking and speeding are bad driving habits that will lower your gasoline mileage. You should drive consistently at 50 to 60 mph to realize savings on fuel economy. You should also switch off the engine when you're parked. Engine idling usually eats up around a quarter to a half-gallon of tank fuel within an hour.
The Bottom Line
Buying a car comes with running costs that may drain your pockets. Fortunately, the tips mentioned above can help reduce your car ownership expenses. The trick is to practice these cost-saving measures consistently to achieve considerable gains down the line.
