How to Reduce Monthly Automotive Costs

by Erika Torres
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adAre you trying to save up to pay off student loans, plan ahead for your child’s future education or to put a down payment on a house? Saving for the future entails finding ways to cut your regular bills each month. Aside from the cost of housing, the cost of owning and running a car can be a household’s most significant expense. You may not only be paying off an auto loan, but also be paying additional fees including insurance, fuel, and maintenance each month. Fortunately, there are many creative ways to cut your monthly car-related costs without walking everywhere!

Bundle your insurance services.

If you’re already paying for home or renters insurance, try to bundle this with your auto insurance to benefit from multi-line discounts. This could help shave a certain percentage off of your monthly rate.

Buy an economic vehicle.

Some vehicles will simply be cheaper to operate than others. If you’re shopping around for a car, you’ll want to look carefully not only at its sticker price but also at factors including fuel efficiency and how it holds its value over time. You can click here to access a car news and review site to see how various models stack up against one another. Another factor to consider in addition to general economy and value for money is whether or not the car is loaded with the latest safety features. Cars that come equipped with anti-lock brakes, electronic stability control, and extra airbags will be easier (and cheaper) to insure.

Become a more efficient driver.

The type of car you choose goes a long way towards determining what your monthly automotive costs will look like, but so does your behaviour behind the wheel. You needn’t drive like a granny to boost efficiency, but avoiding sudden starts and stops and driving at a consistent speed will help you get the most mileage out of your car.

Avoid dealership financing.

As you shop around for a new or used car, it’s tempting to sign up for financing through your auto dealer for a one-stop shopping experience. However, you’ll usually pay for the convenience in the form of higher interest rates and hidden administrative fees. If your credit rating is decent, it’s probably better to shop around to find the best deal on financing from local banks or credit unions instead.

Consider refinancing your loan.

Have your financial circumstances changed since you first signed a car loan agreement? You may be able to refinance your loan to benefit from more favourable terms. Lower interest rates could help you pay off the loan at a faster rate, or leave more money in your monthly budget for other important household costs.

Reduce coverage for older vehicles.

Is your car getting up there in years? You won’t need the same level of insurance coverage for an older model that you would for a brand new one, because it will cost less to repair or replace. Consider getting rid of collision coverage entirely if you’re planning on purchasing a new car in the near future, as this makes up the bulk of your insurance costs. If damage is sustained to an older vehicle, it may simply be time to upgrade to a new one.

The right strategies for reducing the cost of car ownership will depend on your personal situation, the type of car you drive, and your daily commute. Following these tips can leave you with more money each month to put into savings and meet your other financial goals!

 

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