Having a car is undoubtedly practical and convenient, especially when public transport or family assistance isn’t easily available. The advantages of having a car range from commuting to work, dropping off kids at school, or running daily errands.
However, maintaining a car comes with a weighty price tag, including monthly payments, insurance, fuel and maintenance charges. In fact, AAA’s 2021 report states that the mean spending for owning and operating a new car was $9,666.
The budget for your automobile can fluctuate yearly, affected by diverse factors and owning a second-hand car doesn’t necessarily imply that it’s affordable. If you are searching for methods to reduce your car expenditures this year, rest assured, you aren’t alone. Here are five practical strategies you might consider:
1. REFINANCING YOUR AUTO LOAN
Most probably, your auto loan is the heaviest monthly charge related to your car. Stats suggest that monthly car payments have soared in the past few years, averaging at $667 for new ones and $515 for used.
Refinancing your auto loan could be a plausible strategy to reduce your monthly payments and potentially decrease the interest rates. Do make sure your credit score is satisfactory and you’ve explored the best available offers before proceeding. Utilizing a refinancing calculator could help you ascertain the financial benefits of refinancing your loan and can provide reassurance about your cost-cutting capabilities.
2. COMPARING CAR INSURANCE PRICES
Taking some time each month to browse for car insurance options can’t hurt, even if you’re happy with your current one. Their offers might include a reduced premium or an increased protection for your vehicle which can lead to potential savings. Tools such as The Zebra allow you to weigh multiple insurance offers, while options like Metromile determine your insurance premiums based on the distance you drive.
3. UTILIZING A FUEL REWARD APP
The inconsistent price of fuel isn’t within our control, but you can accumulate rewards and cash backs regardless, with apps such as Upside. With Upside, you can earn cash-back rewards every time you refuel. Additionally, you can also avail of other cash back offers when you dine at selected restaurants.
4. MAINTAINING A MAINTENANCE SCHEDULE
Establishing a maintenance schedule for your car can significantly reduce unnecessary costs. Develop a system where you record when your vehicle requires certain services such as oil changes, tire rotation, brake pads, etc. Don’t underestimate regular check-ups and upkeep as they can deter minor issues from becoming major headaches.
5. LOOKING AT ELECTRIC OR HYBRID CARS
Another way to shrink your car expenses could be switching to an electric vehicle or a hybrid one. Electric cars are designed with less parts, reducing the maintenance costs. Gas price fluctuations won’t affect you as much with the availability to charge at home or designated stations.
Ultimately, car ownership doesn’t have to ravage your yearly savings. By implementing these methods to bring down your car costs, you’ll have more financial freedom and flexibility for other areas in your life, whether that’s boosting your emergency fund, clearing debt or simply wanting more cash flow every month. Cutting down on car maintenance and operative costs can definitely help extend your disposable income.
