Saving Money: How to Lower The Cost Of Car Ownership

Saving Money: How to Lower The Cost Of Car Ownership

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Buying a car is expensive, but you’ll also agree that owning and operating a car can be taxing on one’s finances, with rising gas prices, recurring parking fees, unexpected car repairs, and continually increasing maintenance costs. The truth is that a car is a necessity for the vast majority of Americans but it doesn’t come cheaply.

Well, that shouldn’t stop you from buying and owning one. The first thing you probably need to do is to determine exactly how much it will cost you to own a car in the United States. According to the U.S Bureau of Labor Statistics, owning and operating a vehicle in the country costs $9,576 per year on average- $4,054 buying price, $1,968 for gas and oil expenses, and the remaining $3,554 for other costs. Regardless of how much it costs to own and operate your car each year, it’s important that you cut costs, where possible.

Now, it’s impractical and impossible to eliminate all your spending on transportation, but that doesn’t mean you can’t keep your costs low. Like many car owners, you could be blaming gas, maintenance costs, insurance costs, and depreciation for the rising cost of car ownership. The good news is that these are the factors that impact the cost of owning a vehicle, and understanding how they do so can help you lower the total cost of owning and operating your car. Let’s dive in and find out.

Car Insurance Costs

Insurance coverage is a mandatory requirement by law in almost all states and there’s no way around it. However, it’s important to note that the cost of insurance varies depending on the company, type of policy, driver’s experience, age, and type of car. The average cost of car insurance in the U.S is $78 a month or $907 a year. That said, here are four ways to lower your insurance costs:

  • Take time to shop around for a new car insurance provider every year so you can find the right insurance deal and a cheaper option that could save you money.
  • Ask your provider about a cheaper policy. If you drive less frequently, consider discussing with your insurance provider about lowering your monthly premiums.
  • Ask Your Insurance Company About Discounts. Many insurers are already offering auto insurance discounts to drivers whose cars have safety equipment like airbags, anti-lock brakes, and daytime running lights. Other kinds of discounts include multi-policy discounts, multi-car discounts, anti-theft discounts, defensive driver discounts, good student discount, and pay in full discount. These discounts could help you save hundreds of dollars, thereby lowing your car ownership costs.
  • Don’t Let Your Teen Drive Just Yet. According to the Centers for Diseases Control and Prevention (CDC), teens aged 16 to 19 are nearly three times more likely to be involved in a motor vehicle crash than drivers aged 20 or older. It has also been shown that teen drivers increase their parents’ insurance costs by an average of 60 percent. Making your teen wait a little longer before you can add them to your auto insurance policy could just save you hundreds of dollars in insurance costs.
  • Look into extended warranties. If your manufacturer warranty runs out and your engine gets damaged or your vehicle experiences some sort of malfunction, you could end up paying way more out of pocket. Research warranties that align with your vehicle. For instance, if you have a jeep, learn more about how Jeep warranties can help lower repair costs.

Fuel Costs

Nearly 90 percent of American households spend an average of $250 a month on gas. That’s over $3,000 a year even though this figure may vary significantly depending on the type of vehicle. Here’s how you can save on fuel:

  • Pick your new vehicle with an eye for fuel-efficiency. It’s no secret that fuel is the second-largest expense when it comes to owning a car. As such, it’s crucial that you take time to shop around and purchase a vehicle with good fuel economy.
  • Avoid Aggressive Driving. A recent study found that slamming on the brakes when driving can lower gas mileage by about 15 to 30 percent at highway speeds and roughly 10 to 40 percent in stop-and-go traffic.
  • Lighten Your Load. Carrying an extra weight of about 100 pounds could lower your car’s fuel efficiency by 1 percent.
  • Use Cruise Control and maintain a constant speed when on the highway to save fuel.
  • Make Sure your Tires are Properly Inflated. The less inflated your car tires’ are, the higher the rolling resistance, which could hurt your fuel efficiency.

Depreciation Costs

Many people don’t consider depreciation to be a real cost because it usually isn’t a cost of car ownership that you have to pay for. Neither can’t you see it getting deducted from your bank account monthly or yearly. The only time depreciation becomes a real cost is when you’re selling or trading in your car after using it for a few months or years. The truth is that depreciation is the biggest expense of car ownership and even a well-maintained car will still lose value over time. Here’s what you can do to lower your depreciation costs:

  • Choose the right model and make. Buy a car model that not only has good fuel economy and low maintenance costs but also a reputation for reliability. A car with low running costs will depreciate at a slower rate compared to a car with high maintenance costs.
  • Buy a Like-New Used Car. Buying a slightly used car can help you avoid a big chunk of its depreciation costs since the previous owner will have already paid for the initial depreciation in value.
  • Pick a Standard Color. Vehicles with light-colored in factory color schemes are better at maintaining value. Furthermore, they are easier to re-sell or trade-in than cars with custom or unusual colors.
  • Hold onto the Car Owners’ Manual and Service Book. Keeping your service boon updated and the car owners’ manual can help maintain your car’s value. The absence of these documents can result in instant depreciation and even arouse suspicion.

Maintenance Costs

One of the things you don’t want to compromise on is taking your car for routine checks and servicing. Some of the scheduled routine servicing appointments may seem unnecessary but skipping them can result in costly repairs later on. It’s crucial that you follow your car owner’s manual when it comes to oil changes and other repairs.

Maintaining your car can easily feel like a daunting task and a major yearly cost, but it will help you prevent unexpected repairs, helping you save money. You can handle simple maintenance tasks like replacing wiper blades, changing air filters, and rotating tires, if you can.