Besides your home, your vehicle is probably the second biggest drag on your budget. It will always be a major expense for most people but there are ways that you can make some big cuts that will really add up. Let’s take a look.
1. Cut Your Auto Insurance Premium
Have you been with your current carrier for years? If so, yo are probably the victim of rate creep. You typically get a nice low rate at the beginning and then, over the years, it slowly goes up. Most people are apathetic about small changes and will just let a few dollars here and a few dollars there slide. After several years though, you might finally notice the huge change in rates.
It might just be time to shop that auto insurance policy. Luckily, you can do it pretty conveniently online.
Pick three or four auto insurers and get price quotes. Make sure that you use like coverage limits and the same deductibles so that you can make a good comparison. Also, if you have home owners insurance, life insurance or renters insurance, consider bundling to save. Most insurers will give you a discount to earn all of your business.
If you are happy with your insurance but still want to save, consider changing your deductible amounts. If you have a 250 dollar deductible, switching to a 500 dollar one is a no brainer and it could result in a 300 dollar savings or more depending on your current rate. The switch up to a 1000 dollar deductible usually has less of a positive impact on your rates. Compare the cost but think about the consequences if you have an accident and have to come out of pocket for the full deductible.
2. Refinance Your Loan
There are a lot of times that refinancing an auto makes sense. If your credit has improved or if rates have gone down, you can probably realize some savings on your loans monthly payments. In addition, if you obtained auto financing from a dealership, they probably tacked on a few percentage points to your interest rates and you will almost always benefit to a refinance.
Refinancing an auto is easy and typically free. Just fill out an application online and if approved, the new lien holder will do most if not all of the work getting things transferred over. Be sure to shop at least three different finance companies, don’t worry about the inquiry hits on your credit. It is a known fact that most people shop around a loan and a bunch of inquiries at once will usually be considered a single strike.
A quick tip, if you have never refinanced before. If you currently have gap insurance, when you refinance, that policy will be cancelled. You can then request a refund of the unused portion. In addition, if you are still backwards on your loan, you should consider taking out a new gap policy.
3. Save On Fuel Costs
There is something about the cost of fuel that really irks people. People will drive 20 miles out of their way just to save 5 cents a gallon. It doesn’t make sense wasting fuel to save money on new fuel, it usually balances out in the end. Enough rant, fuel expense is still a major cost and something that can easily be reduced.
The best way to reduce fuel cost is to cut down on how much fuel that you use. To do this, keep your engine running right. This means frequent tune ups and keeping your tires properly inflated. This will not only save you money on fuel but it will also keep your car in better condition and extend the life of your tires, further increasing your savings.
In addition, download the Gas Buddy app that will find you better fuel rates. No, I am not saying to drive out of your way for fuel but use it to find the best deal on gas along your regular route. Chances are that to and from work, you pass nearly a dozen gas stations. This app will tell you which one you should stop at to save.
When at the pump, one last tip is to choose the right fuel. Use only the octane rating required for your vehicle. Higher octane fuel, unless your vehicle requires it, is not better for your vehicle. It will only cost you more. Also, be aware that blends such as E85 often greatly reduce fuel economy. This negates the savings that these fuels offer.
4. Do Your Maintenance
Vehicle repairs can be a huge expense. To prevent these repairs, the best thing that you can do is regular maintenance. Even if you are under warranty, you need to do your maintenance or else future claims can be denied.
At the minimum, change your oil regularly and switch to synthetics for even more reduced wear and longer oil life. Also, make sure that all fluid levels are checked regularly.
Beyond that, there are a slew of maintenance procedures that most cars need after 30,000 miles but most people fail to do them. This includes transmission filter changes, differential fluid changes, cooling system flushes, etc, etc.
The best thing that you can do is read your manual and see what your particular vehicle needs and when. Follow it closely to ensure that your vehicle lasts and that you maintain your warranty.
The cost of maintenance and the time it takes is trivial compared to the cost of a major repair. A new transmission can easily cost 4000 dollars or more while the cost of a high tech diesel engine replacement can easily top 10000 dollars. In addition, a well maintained vehicle is going to bring you more money upon trade in and get better fuel economy.
