Owning a set of wheels is an expense to be sure, but there are steps you can take to keep the costs down. These tips can help you save money on both one-time and ongoing car expenses:
- Make a higher down payment to reduce the amount of money you need to borrow.
- Check with different lenders to find a low interest rate.
- Take out a short-term loan of no more than 60 months.
- Consider insuring your car and your home with the same company to get a multiple-policy discount.
- Periodically shop for insurance quotes. Your current insurer may match a competitor’s lower price, saving you the hassle of switching companies.
- Annually review your car insurance policy with your insurance agent to see if you can change the coverage and lower your insurance payment.
- Remember—generally newer and more expensive cars may have a higher insurance payment.
- The higher the deductible, the lower your insurance payments, but the more you’ll pay out of pocket if your car is stolen or involved in an accident. Choose the highest deductible you feel comfortable with.
Taxes and registration fees
- Both of these are tied to your car’s value. A less expensive car will cost you less in taxes and registration fees.
Calculating Maintenance Costs
Maintenance is important if you want to keep your car in good running condition. Costs for a car’s upkeep vary depending on many factors, such as vehicle age, make and model, and mileage. Generally, the older the car, the more maintenance it may need. Once you’ve paid off your loan, consider saving at least a portion of that monthly payment amount for future repair costs.
Because a well-maintained car can help keep repair costs to a minimum, it’s important to factor those maintenance costs into your budget. According to a 2015 report from AAA, here is what it will cost you to own and maintain the following vehicles (total costs include average monthly loan payment amount):
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