If you have a car, you know how valuable it is in terms of helping you get around. You may not live near public transportation or family and having a car can help you get to work, take kids to school, and run errands easily.
That said, owning a car can be expensive. Most people have a monthly car payment and insurance not to mention the cost of gas and maintenance. According to the AAA, the average cost to own and operate a new car in 2021 was $9,666.
How much you spend on your car each year can vary depending on a number of factors and owning a used car is not always cheaper. If you’re looking to lower your car expenses this year, you’re not alone. Here are 5 key ways to make this happen.
Refinance Your Auto Loan
If you have an auto loan, this is probably your biggest monthly cost for your vehicle. Monthly car payments have been climbing these past few years with the average payment for a new car reaching $667 and the average payment for a used car averaging out to $515.
Refinancing your auto loan could help you lower your monthly car note and even reduce your interest rate providing some relief. There’s really no required timeframe for you to be able to refinance your car loan.
Just make sure your credit is in good shape and you’re able to shop around for the best rates and offers from different lenders. Use a refinancing calculator to make sure it makes financial sense to refinance your auto loan. This can also help ensure that you’d actually be saving money and lowering your car expenses in a major way.
Shop Around For Car Insurance
Make it a habit to shop around for auto insurance at least once a month. Even if you’re happy with your current insurance policy, it doesn’t hurt to see what else is out there.
Perhaps another company will offer a lower premium or more protection for vehicle. Being properly insured can save you hundreds to thousands of dollars if you are ever involved in a car accident or if your car breaks down unexpectedly.
Use resources like The Zebra to compare auto insurance quotes from multiple companies all in one place. Or, you can consider alternative insurance options such as Metromile where your auto insurance premiums are determined by how much you drive.
If you work remotely or don’t put too many miles on your car in a given month, you could probably save money on auto insurance by switching to Metromile.
Use a Gas Savings or Rewards App
The price of gas is always fluctuating and there’s not much any of us can do about it. One thing you can do is start earning rewards and cash back for your gas purchases.
Upside is a free app that will help you earn cash-back rewards each time you use the pump. Just download the app and open if when you’re about to get gas. Upside will show you nearby gas stations and how much cash back you can earn per gallon. Select the offer you want to use then head to the gas station and check in when you get there.
Depending on the place, you may need to scan your receipt after you fill your car up. Or, you just need to use the payment card you added to Upside and Upside will see that you made a transaction there and award your cash back.
To maximize your rewards with Upside, you can take advantage of other offers too such as dining at certain restaurants to earn cash back.
Don’t forget about store rebate apps like Fetch and Ibotta. These apps may not give you rewards for buying gas specifically. However, you’ll get rebates when you make certain purchases at your favorite grocery and online stores. You can cash out your earnings and use this money to supplement your fuel expenses.
Establish a Maintenance Calendar
Another way to lower your car expenses is by using a maintenance calendar. Use your car’s manual or simply search online for common vehicle maintenance services and when to do them.
Some auto repair shops even share maintenance tips and schedules online so you can print them out. Add specific maintenance services to your calendar whether it’s for oil changes, tire rotation, brake pads, etc.
Don’t ignore your check engine light if it ever comes on because this could lead to a smaller issue worsening over time. Maintenance is just a necessary expense you’ll need to prepare for when you have a car.
There’s no way around it but you can save more money when you set money aside in advance and take your car in for routine maintenance regularly.
Consider Switching to an Electric Vehicle or Hybrid
An electric vehicle or even a hybrid vehicle that uses fuel and electric power could certainly help you lower your car expenses in some ways. While some electric vehicles or EVs are costly to buy, such as a Tesla, there are many other models and even some used EVs that are priced similarly to a regular used car that runs on fuel.
Since EVs are made with fewer parts and systems, your maintenance costs will decrease as well. You won’t need to get tune-ups or oil changes anymore among other things. There are many places that allow you to charge your vehicle and you can also charge it overnight at home. That way, fluctuating gas prices won’t affect you as much.
Summary: Lower Your Car Expenses to Free Up Money In Your Budget
Owning a car doesn’t have to cost you thousands of dollars per year. Use these tips to lower your car expenses so you can free up more money for other areas of your budget. Whether you’re looking to save for your emergency fund, pay off debt, or simply have more cash flow, spending less on maintaining and fixing your car will help you stretch your spending.