• In this short 6 minutes read article
  • Know how to save on car ownership
  • Your car warranty options

The true cost of car ownership

 

According to the U.S. Bureau of Labor Statistics, consumers in the United States spent an average of $3,634 in 2016 to buy new or used vehicles. Spending averaged $1,909 on gasoline and motor oil and $1,149 for car or truck insurance. Adding up those and other costs, such as maintenance and licensing, total vehicle spending averaged $8,427 in 2016.

 

The average costs you can probably assume has risen since then. The obvious big costs of car ownership as you are aware are:

  • Cost of the vehicle purchase
  • Interest on the car loan and other financing costs
  • Car insurance, fuel, and maintenance

 

Before we detail the above costs below, here are three other car ownership costs that you may overlook when budgeting.

 

  • Parking. In most urban areas, whether you drive in the city or live in the city, you cannot avoid parking fees. Try to avoid them, may just get you a ticket, adding to the true cost of car ownership.
  • Taxes. In some states, you may pay a property tax for the car. This tax may be referred to as excise tax charged by the town or city you reside in.
  • Registration fees. To get your license plate, you have to visit the DMV.

 

 

Read: Does a car insurance quote affect your credit score

Several ways to save on car ownership

Depreciation. You have very little control over depreciation. Cars depreciate about 20% – 30% on year one. Autotrader.com has a car resale value calculator. Depreciation continues year after year which you really don’t have much control over.  Use your car gently, keep up with maintenance, and drive fewer miles. 

 

Save money on a new car purchase

3 Mistakes to avoid 

  • Immediate depreciation. As soon as you drive off the car dealer parking lot with a brand new car, the value drops 25% the first year. It’s best to buy a slightly used car. It is possible to find a car that has been used for less than a year.
  • $0 down payment. It is best to plan ahead and save some money for the down payment. Due to the immediate depreciation, you are underwater from day one. Zero down also means you financed more money and will pay interest on a larger amount.
  • Buying more car than you need. The new car smell, more luxury options are enticing. But they come with a price tag. 

 

Save money on gas

Gas prices always fluctuate but never will they be zero. 

  • Gas prices. This sounds rather obvious but check your neighborhood gas stations for the lowest price. Plan your trips well to never have to gas up in expensive area gas stations.
  • Check your tire pressure often. Maintain the PSI to the manufacturer’s recommended setting.
  • Proper maintenance. Regular tune-up and oil changes will help. Of course, if you drive an all-electric car, you have different maintenance requirements. 

 

Save money on car insurance

Insurance costs are a necessary requirement. Your car financing company requires it.  Three ways on how to save on car insurance.

  • Improve your driving record. You pay more if you have a spotty record. Speeding tickets, accidents all increase your premiums.
  • Apply all discounts. If you are a member of AAA, they may have car insurance discounts you can apply to some insurance companies.
  •  Get a new quote. Insurance companies are always trying to compete for your business. Take advantage of this and apply for quotes from different insurance providers. Get a quote here in minutes. 
  • Click here and get a lower rate in minutes.

 

Save on maintenance 

Always put money aside for car repairs, as they are expensive and will most definitely be required.

  • Perform regularly scheduled maintenance. This includes il change, tune-ups, brakes service, checking all fluid levels, and a few more. They are preventive maintenance on your car. This well done will keep your car running longer.
  • Shop around for car service. Your car repair costs include parts and labor. The labor part can be the higher amount. Check the hourly rate of different neighborhood repair shops in your area. This will make a difference. 

 

Get an affordable vehicle warranty cover.

The car manufacturer offers you the manufacturers’ warranty. however once this expires. you are on your own. There are several fairly priced aftermarket vehicle warranty. As your car is getting old, it will need more repairs that become more expensive with time. 

Some of the big cost repairs include transmission repair or replacement, air conditioning unit, engine, suspension, gaskets, steering system among others. Check what is covered before agreeing to the contract. A vehicle warranty can save thousands in car repairs. 

Some of the car warranty benefits include:

  1. Towing coverage after a breakdown
  2. Roadside assistance coverage
  3. Lost key replacement
  4. Transmission and engine replacement

Get an affordable vehicle warranty today and prepare for the unexpected.