Trying to Reduce Expenses? Sweat the Big Stuff! – Car Costs

When first attempting to get our finances in order it can seem overwhelming. We will find all types of tips and advice to reducing our expenses.

They may include eliminating fees from your bank account, choosing the right credit card offers, using coupons, washing out Ziploc bags, mixing your dish detergent with water, squeezing your toothpaste tube from the bottom, and more. Much much of this can seem overwhelming especially if you are just starting out.

That’s why I would suggest that you take a look at a few large areas in your budget and work on those. These are just a few “big ticket items” that can help make a huge dent in your spending. Today we are going to take a look at automobile expenses:

Insurance

First, make sure you know how much insurance you actually need. Many people add coverage to their policy that isn’t necessary in their situation. You can always increase the deductible to an amount that you’re comfortable with and then put the difference into your emergency savings account (or use it to build a cushion in your checking account).

Another suggestion is to drop the medical coverage if you have adequate health insurance. Also, if your car is only worth $1,000, it probably isn’t worth it to have full-coverage.

Once you determine the correct level of coverage, then you should shop around for the best rates. Be sure to consider other factors besides price, including availability of an agent, the experience of family and friends, and then look for any complaints against the company with the Better Business Bureau.

Make sure you are taking advantage of any discounts that are offered for having a clean driving record, taking a defensive driving course, or even for having a high G.P.A.

Also, if you have multiple policies – life, homeowner’s or renter’s insurance – you can probably get a sizable discount for having them all under one company.

Do you really need two cars?

According to AAA, it cost $7,681 to own and operate a car in 2009 (link opens as a PDF). This DOES NOT include monthly payments or insurance. If you own two vehicles and can get along with one, this is a great place to save big immediately! Even if you own one car, depending on where you live and work, you can eliminate this expense altogether – or at least reduce it by switching to a cheaper model. It may even be profitable for you to sell your vehicle and rent a car on the occasions that you need it.

Don’t neglect maintenance!

Simple things such as oil changes, tune-ups, replacing your air filter, and even checking your tire pressure can add years to the life of your vehicle. They can also help you to avoid costly repairs down the road. Not taking two minutes to check the amount of anti-freeze you have can mean having to replace your radiator (or even engine) next month!

photo credit: bitzcelt

Since I was known to have a lead foot back in my day, let me add these in as well. Don’t speed, do drive at a consistent pace, and don’t idle for more than a minute or two. Once your car goes above 60 mph, it becomes extremely fuel inefficient and will cause you to fill up your tank much more often. This is also true for people who constantly speed up and slow down (tailgating for instance). For more extreme ways to save money on fuel costs, you may want to research what is hypermiling.

There are plenty of other things that you can do to help cut your auto costs, however these should have a large impact rather quickly.

What are some of the things that you do to cut your car costs? Have you decided to get rid of your car altogether? Have you changed insurance companies lately? Do you regret it?

I look forward to your comments!

photo credit: purpleslog