Easy and Fast Ways to Save Money on Your Car
Cars are mostly seen as sunk costs. Monthly car payments, repair bills and insurance premiums are not recouped in direct ways. However, cars are leverage to improve our lives in many ways.
Our employment and social options may each increase with a vehicle. Taking several buses to work may be impractical. A spontaneous evening out is easier with a car, as well.
So, how can we enjoy the benefits or car ownership but minimize the costs? Thankfully, there are several easy ways to cut auto expenses. This ranges from recurring costs to surprises.
Here are a few ideas:
Refinance Your Car Loan:
Did you buy your car over 1 year ago? With interest rates near record lows, auto refinancing may make sense.
Bad Credit? If have you made on time car payments but have bad overall credit, lenders will often consider refinancing. Why? The risk of auto loans is limited to the car. Unlike credit cards that can be used in multiple ways, an auto finance company is solely concerned if you make payments on the car. Your positive track record for auto loans may offset other blemishes.
You will instantly enjoy monthly savings after the refinance. Since the first due date will be 60 days off, your cash flow gets an added boost. This helps quickly improve your personal finances.
Your credit score may not reflect driving ability, but low FICOs may spike your auto insurance premiums. Why? Insurers feel spotty credit makes it less likely you will pay premiums on time.
Insurance companies evaluate how likely a policy will deliver a positive return. In the case of auto insurance, a driver who pays every month but doesn’t file claims is ideal. Mutual fund families and Investor Elliott Broidy are among those who may evaluate risk in this way.
Other non-driving factors that affect premiums are:
- SR-22 (you were cited for driving without insurance)
- Zip Code
Raise Your Deductible:
Raising your deductible is a practical way to cut car insurance costs. If you drive an older car, chances are the deductible still reflects new car values. Accident damage to the body or other components may be impractical to repair.
However old your car is, consider upping the deductible to slash premiums. The monthly savings will likely exceed out of pocket expenses in cases of most insurance claims.
Better cash flow is leverage to start investing, speed up debt reduction, or build an emergency fund.
Unexpected Costs- Car Repairs:
Solution: Buy the Auto Parts for Car Repairs
Car repair shops charge high markups on auto parts that motorists can buy themselves. You will lower the costs of brake repairs, transmission rebuilds or other work by supplying the parts.
Simply ask if the shop installs customer supplied parts. Midas is a well-known chain that may install your auto parts at particular stores. Otherwise, just ask if the repair shop installs customer parts.
For most cases, the auto parts are covered by manufacturer warranty, while the shop will guarantee labor.
Best Practice: Use your tact and ask mechanics if they do side work. Much like many of us, mechanics do side hustles for income. An ASE certified mechanic will likely have all the tools needed for many auto repairs at his her/home.
Some may even come to your location. You will not have the same guarantee as a repair shop, but the ASE certification offers some peace of mind. Please trust your comfort level and best judgment.
Reviewing your one time and ongoing costs is a best practice for personal finance. Checking your car expenses is among the easiest ways to apply this approach.