Do you know what one of the largest household expenditures in the United States is? If you said transportation, then you guessed it. An average household spends around $11,000 on transportation, almost the same amount spent on food, housing, or healthcare. This is why you might want to learn how to reduce car costs.
As you can see, owning a car is expensive, but the good news is that there are plenty of tricks and hacks that can help you keep the costs as low as possible. Most of them are things that are accessible to the average American, and this is why we want you to know about them. Read on and find out about the best ways to reduce car costs!
1. Reliability first
You need to know that most of the reliability ratings that you can find out there are calculated by websites such as RepairPal by analyzing large amounts of data to determine criteria like the frequency of unplanned repairs, the severity of those repairs, and the average yearly cost of repairing and maintaining a particular model.
Models and even whole brands receive data-driven dependability awards from companies like J.D. Power. The cost difference between a reliable vehicle and one that always needs maintenance can quickly reach several hundred dollars annually and even thousands over time.
This is why you should always get information about the reliability of a car before purchasing it. Maybe it doesn’t sound like a big deal now but believe us when we tell you that this is one of the most effective ways to reduce car costs. Do this before buying the car, and you will be sure that you have already saved a few thousand dollars.
2. Reduce car costs: basic car maintenance is key
Do you want to reduce car costs? Then you should know the basics of car maintenance. Spend some time learning about the basic functions of your vehicle by studying the owner’s manual. While you don’t need to replace your oil or rebuild your gearbox, you still need to know how to verify it. Learn how to carry out routine maintenance and inspections and save money.
This includes cleaning and changing spark plugs and air filters, as well as inspecting and changing your air pressure, filling and checking your fluids, and cleaning the points of contact on your battery.
If you do all of this yourself rather than hiring a mechanic, you’ll not only save money on car upkeep but also improve performance and reduce the risk of a sudden mechanical failure.
3. Get a hybrid
A hybrid is a vehicle that has one regular gas engine that is augmented by at least one electric engine. When comparing a hybrid car’s price tag to that of its conventional internal combustion engine cousin, Forbes estimates that the electric motor adds roughly $3,000 to the price.
This might make you wonder how you will reduce car costs if you buy a hybrid, and we are here to answer this question. When you account for the money you’ll save on gas, owning a hybrid costs less over five years. This is the secret.
Popular hybrids and their all-gas equivalents may be quickly compared using an easy-to-use tool provided by the Department of Energy’s Office of Energy Efficiency and Renewable Energy (OEERE).
Simply choose your preferred hybrid, and this tool will provide you with a comparative vehicle, a comparison in MSRP, combined mpg, and weekly, monthly, and annual fuel expense savings. A hybrid’s estimated “payback period,” or how long it will take for it to outperform a comparable vehicle in terms of value, is another thing you’ll get.
4. Read the small print of the ads
Ads are made in such a way that they can easily trick you, and this is why you should always be careful about them.
If you look at an ad for an SUV car or other big vehicle, you will see how they can climb mountains and go through forests and rivers, but is this how things work in real life? Then, if you look closely, you will see that it is written there in small font that you should never try to do this and that the driver from the ad is a professional.
Jeeps and Land Cruisers are two examples of all-purpose cars that are true off-road champions. All SUVs and trucks, on the other hand, are essentially just highway cars with remarkably low elevation and wading depths that are capable of carrying and managing challenging terrain.
If you are wondering how being aware of this information can reduce car costs, you should know that being aware of what car you buy and what that car can do is essential if you want to keep the vehicle for longer.
Vehicles never intended for off-road use should not be put through this kind of stress; you risk damaging the vehicle and maybe canceling the warranty.
5. Refinance the car loan
To refinance a car loan, you may simply look for a different lender if your credit score has risen since you purchased the vehicle or if the dealership landed you on an unfavorable loan. You might save hundreds of dollars over the term of the loan by refinancing, which can also decrease your interest rate. This can happen more than you can imagine, but hopefully, it is not as hard to change the lender as it might sound.
In the case of a client with a credit score in the substandard range (501 to 600), the median yearly interest rate for a used car loan was 16.4%, as per the latest data available from Experian. The average APR for individuals in the next tier, which included those in 601 to 660, was 10.13%.
Refinancing from 16.4% to 10.13% on a $20,000 loan for a car for 60 months would save the borrower $64 per month and almost $3,600 in total.
You can also change the payment schedule when you refinance. You can prolong your loan term if necessary. Or maybe you can even return the debt earlier.
6. Sell a car or downsize to a cheaper one
Many times, it happens that a family has two cars. But is it really necessary to have more than one vehicle? It’s possible that you aren’t even using it, but even so, you still need to register, insure, and keep it maintained. Why not make money out of it? If you want to sell a second-hand automobile, you should be aware that the best time to sell such a car is between late February and mid-April.
Perhaps you bought the top-of-the-line car with all those extras and facilities at the dealership, but now you regret spending so much money on it. Trading in is the easiest way to carry out the switch, and new online stores like Carvana, Shift, and Vroom might help you do so.
Perhaps you bought the top-of-the-line car with all those extras and facilities at the dealership, but now you regret spending so much money on it. Trading in is the easiest way to carry out the switch, and new online stores like Carvana, Shift, and Vroom might help you do so.
If you know of any other tricks to reduce car costs, share them in the comments section!
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You should also read: Big City Life: These Are the BEST 26 Cars for City Drivers
