Buying a car is one of the most expensive purchases that the average consumer makes in their lifetime, next to buying a home. However, similar to purchasing a home, there are many ongoing costs that come with buying a car. In fact, owning and operating a car is the second most expensive household cost, whether you bought it new or from a used car dealership. A study conducted by the American Automobile Association focusing on the costs of driving found that continual upkeep for a car costs an average of $8,700 a year. That comes out to an average of $725 every month or 58 cents per mile driven.
If you want an idea of how much it will cost to upkeep a certain vehicle before you buy it, Kelley Blue Book offers a cost of ownership calculator on their website. By inputting information such as the year, make, and model, this calculator will estimate the total amount of costs you will likely incur during the first five years of owning that car. This includes out of pocket expenses, such as gas, insurance, maintenance, state fees, financing, and depreciation of the vehicle for the first five years you own it, otherwise known as the loss in value. If you are looking to make an affordable automobile purchase, look for dealers that offer repairable cars for sale.
Once you own the vehicle and are driving it daily, there are a plethora of strategies that you can employ to help you save money on your car over its lifespan. There are three main categories in which you can save money on your car. They are gas costs, car insurance, and maintenance and repairs.
Saving on Gas
Driving safely and sensibly is one of the simplest and most effective ways to save on gas costs, and therefore save money on your car. Speeding, rapid acceleration, sudden braking, and other forms of aggressive driving are known to waste gas. According to a study by the Oak Ridge National Laboratory, aggressive driving can lower your fuel economy up to 5% for city driving and up to 33% for highway driving. This will cost you up to an additional $477 a year or 13 to 89 cents for every gallon, depending on how many miles you drive and how aggressively you drive.
If you often let your car idle, you are wasting a lot of energy and money. In fact, an idling vehicle uses about a quarter to a half-gallon of fuel every hour, according to research conducted by the Argonne National Laboratory. On the other hand, turning off and restarting your car only uses about 10 seconds worth of gas. Therefore, if your car is parked and you are waiting, it is highly recommended you just turn your engine off. Another common way gas is wasted is by letting your car warm up during the cold winter months. Rather than letting your vehicle idle to warm up, most car manufacturers recommend starting your car and driving it slowly for 30 seconds. This is the fastest way to warm up your car because the fastest way to heat up an engine is by driving it, which will allow the heat to kick in faster. By not idling your vehicle or letting it warm up, you can save money on your car, in fact, up to $140 a year.
Regularly using your vehicle’s air conditioning is actually a huge consumer of fuel. In fact, using your car’s air conditioning can lower its fuel efficiency by over 25%, according to the Oak Ridge National Laboratory. To save money on your car, try driving without the air conditioning running or set to a higher temperature. However, there is another option which is a combination of the two. First, drive with the windows open to let all the hot air out. Then, alternate between driving with your windows down when you are driving at a low speed and using the air conditioner when you are driving at a high speed. By cutting down on the time you use your vehicle’s air conditioning, you can save up to $120 a year on extra gas.
Driving at 50 miles per hour is another simple and effective way to save money on your car, since fuel efficiency usually decreases once you exceed this speed. According to research from the Oak Ridge National Laboratory, for every 5 mile per hour increment you drive over 50 miles per hour, you will be paying an additional 20 cents per gallon on gas. This comes out to an extra $198 a year if you usually drive 60 miles per hour on the highway. To save money on your car, set your cruise control to 50 miles per hour on the freeway.
Surprisingly, the motor oil you use can significantly impact your vehicle’s fuel economy. If you do not use the grade of motor oil recommended by the manufacturer, your fuel efficiency could be lowered by 1% to 2%. This is due to the increased friction in the engine. Using the manufacturer’s recommended grade of motor oil will prevent parts in the engine from grinding together. The Oak Ridge National Laboratory says to use motor oil with the words “energy conserving” listed on the performance symbol from The American Petroleum Institute. This will ensure that the motor oil contains additives that reduce friction in your engine, which helps you save money on your car.
Saving on Insurance
One of the best ways to save money on your car is by saving money on insurance. To find the best prices on car insurance, try shopping around with various auto insurance companies, especially if you are shopping for a new car. In 2020, the average price of a new car was about $40,000. When your car insurance policy expires and it is time to renew, shop around with at least four other auto insurance companies and get annual quotes. According to a study by J.D. Power, only 39% of Americans shop around for car insurance in a single year, even though the study also found that there are huge savings to be had by shopping around.
Before making a decision, check with the National Association of Insurance Commissioners to make sure the insurance company has a low complaint ratio. Those who shopped around on car insurance and decided to switch their policy saved an average of $388 a year, according to the same study by J.D. Power. To save money on your car, do not overlook shopping around on insurance.
Bundling your insurance policies is another great way to save money on your car. This refers to covering your home and auto under a single insurance policy. By bundling your home and auto insurance, you could save approximately 10% every year on your rates, according to Kelley Blue Book. A study conducted by Consumer Reports found that among 2 billion price quotes from over 700 insurance companies across the country, bundling home and auto insurance saves the average customer about $97 every year. However, these savings will vary drastically based on your location. For example, residents of Michigan see the biggest savings by bundling home and auto insurance at $240 a year. To save money on your car, contact your insurance company and ask about bundling your home and auto insurance.
While you have your insurance company on the line, you can ask them about any mileage discounts they offer, which will help you save money on your car. If you practice certain habits that reduce the amount of miles you drive, such as cycling to work or working from home, your car insurance company may offer you a discount if you drive under the average number of miles per year. A study conducted by insurancequotes.com compared the average driver who drove 5000 miles per year with the average driver who drove 15,000 miles per year and discovered the driver who drove less miles paid 8.4% less for car insurance. By asking your car insurance company about a mileage discount, you can save about $92 every year if you drive fewer than 5000 miles a year.
Your credit score could also be affecting your car insurance rate. A study conducted by Wallet Hub compared a driver with no credit history and a driver with excellent credit and found that there was a 49% difference in the cost of their car insurance premiums. Therefore, if you want to save money on your car insurance premiums, work on improving your credit score. When it does improve, shop around for less expensive premiums or contact your insurance company about receiving a discount. According to Consumer Reports, the average difference paid between drivers with good credit scores and drivers with the best credit scores is $214 a year. In some states, this difference is as high as $526 more a year. If you are in need of a bad credit auto loan, there are many lenders online that specialize in bad credit auto financing.
According to insurancequotes.com, filing a claim with your insurance company after an accident when you are at fault can raise your premiums by 41%. If you are at fault in an accident, contact an auto accident attorney to help you with the claim filing and legal process.
If you own an older car, cutting down on its coverage is an additional way to save you money. After a vehicle is over 10 years old or worth less than 10 times the premium, the cost of auto collision repair will likely be more than the vehicle is worth. If you cut collision coverage on an older vehicle, you can save as much as 40% on your car insurance policy. If you cut down your policy to just coverage for property damage and injury, you can save up to $440 each year.
Saving on Maintenance and Repairs
Following the manufacturer’s recommended schedule for maintenance, rather than any car dealer or garage, is a great way to save money on your car, especially in the case of used cars. Car dealers and mechanics will often recommend more frequent maintenance than you actually need for the sake of increased profits. One of the most common unnecessary maintenance tasks recommended to unsuspecting car owners is flushing the transmission and draining and replacing the transmission fluid. Most vehicles manufactured today do not require this maintenance until after they surpass 100,000 miles. You can find your manufacturer’s recommended schedule for maintenance in the owner’s manual that came with your vehicle. If you follow the maintenance schedule found there, you can save as much as $120 a year on unnecessary maintenance.
If your windshield or side windows are damaged, you may be tempted to head to a glass repair shop. These shops will have technicians that are qualified to handle auto window replacements, but if the damage is minor, you can probably handle the repair yourself and save hundreds. You can find a windshield repair kit online or in the auto parts department of just about any retail store. Many are not aware that car window repair is a task you can do yourself.
Rotating your tires is actually an important maintenance task that will save you money in the long run. Rotating your tires is necessary because the front and back tires wear at completely different rates. When you rotate your tires, you ensure that they will wear more evenly and you will not have to replace them sooner than you should. Check your car’s owner’s manual to determine the best mileage increments for rotating your tires. Doing this maintenance task yourself will also save you even more money.
Replacing your air filter is another easy maintenance task you can do yourself to help you save money on your car, along with removing chips in paint, car dents, or changing the oil. Your vehicle’s air filter improves fuel efficiency by keeping dirt out of your engine, so you want to make sure it is functioning properly. To ensure that it is, check your owner’s manual to determine how often it should be replaced, generally about every 30,000 miles. This is a simple maintenance task that garages charge $20 to $60 for that you can easily complete yourself in five minutes or less.
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