The second largest expense after housing is the vehicle cost. This makes your automotive budget another critical aspect of your financial plan. Budgeting implies a lot more than saving money while buying the vehicle. A car budget usually includes the occasional expenses and ongoing costs like gas, insurance and repairs.
Tips to Reduce Automotive Expenses
After you buy a vehicle, there are certain considerations that can help you cut down the overhead expenses that you might incur occasionally. Here are some tips to save on automotive expenses.
- Reassess the insurance – Making adjustments with your current insurance can help reduce the insurance premium amount significantly. For the ones who own older cars, reducing collision and comprehensive coverage can help decrease automotive expenses significantly.
- Compare insurance rates – Another helpful tip to lower automotive expenses is to compare policies and benefits offered by different automotive insurance companies. Doing so after an interval of 1 to 2 years can help you save a considerable amount on premiums.
- Choose aftermarket products rather than dealers for the accessories – If you are fond of car accessories, but don’t want to spend a lot of money purchasing them, it is best you opt for aftermarket products rather than buying from dealers. You can easily get the entire range of accessories from the market at a more competitive price compared to what dealers offer.
- DIY maintenance – Try and do simple maintenance tasks yourself. Changing the transmission or rebuilding an engine are serious tasks and need expert knowledge and skill. Hence, best left to reliable and trustworthy technicians. However, simple maintenance jobs like checking fluid levels, tire pressure and changing a flat are not difficult and you can do them yourself and save money on your vehicle maintenance.
- Reduce consumption of fuel – Sensible driving and proper maintenance can show a significant fall in fuel consumption. With proper driving techniques that aim at increasing fuel efficiency, you can easily reduce the amount of fuel your vehicle consumes, thereby saving you money. Similarly, maintaining the correct tire pressure can raise fuel efficiency by 15 to 20 percent. Controlled driving speed, consolidation of trips and avoiding stop-and-go traffic can also help in increasing fuel efficiency.
- Don’t make decisions based on freebies – Many times, dealers present highly attractive schemes and discounts, like free fuel for one complete year. Don’t get carried away by these marketing gimmicks. Before jumping at such offers, work out the actual cost of owning the vehicle. Moreover, such gimmicks are strong indicators you can get a better deal elsewhere. So, scout around.
Tips to buy smart
Making a smart vehicle purchase can save on automotive expenses that arise later. Here are some useful tips to make a smart purchase.
- Buy what is affordable. Figure out the amount of installment that can be paid easily for the vehicle, without affecting the budget of other expenses.
- Make it a priority to opt for an economic fuel type.
- Before buying, compare the warranties of makes and models that you have shortlisted. Avoid buying a vehicle on the basis of free maintenance services scheduled for a few months.
- Don’t go for vehicles that have poor reliability ratings. Check reviews by current users. You can also get reviews from friends, relatives, and acquaintances with the same make and model you are planning to buy.
- After you have tapered your choice to 3 to 4 vehicles, check the true cost. This implies comparing the cost of selected vehicles over a period of five years.
- Lastly, select a good loan before making the final choice. Make sure you don’t end up paying excessively high interest rates in your eagerness to buy a new vehicle.
A smaller and simpler car is easier to maintain and demands less maintenance, as well. Therefore, buy a car that you can afford, not only at the time of purchase, but also in terms of maintenance and after care.