With the cost of living going through the roof, minimalism and frugality have become the need of the hour. If you wish to build your savings or invest in the future, you either need to earn a whole lot more money or learn to cut corners to make the most of the money you have. While most of us budget by reducing lavish lifestyle habits, we often ignore the car, which, when used wisely, can save you a few thousand dollars every year.
We have always heard that cars are assets with diminishing returns due to the steep depreciation rate. In some cases, such as buying a car on a loan, a car can be considered as a liability. In my humble opinion, a car can be an asset or a liability depending on how you use it and maintain it. If you are curious to know how your car can help you save money, then check out these 5 ways to pinch money on car expenses:
1. Pay off your auto loan ASAP: Opting for a loan to buy a car is a common practice. Without realizing how steep interest rates, low premiums, and elongated term periods can hurt our finances in the long run, we agree to car loan deals that are easy on our pockets. It takes years to pay off car loans because of the exorbitant amount of money that you pay as interests. The longer you take to repay your loan, the more interest you pay. And the more interest you pay, the less you save for your future. The best way to save money on the car brought through financing is to pay off the debt ASAP. Talk to your auto loan provider, and make plans to repay the loan sooner.
2. Refinance your auto loan: If you can’t clear your auto loan debt soon, the next best thing is to refinance your auto loan. If you have paid your loan installments on time without any default till now, there is a good chance that your credit score will be much higher than what it was when you bought your car. Use this improved credit score to your benefit and refinance your car loan to pay lesser on interests. The money you save on interests can be contributed towards building your savings.
3. Constantly search for cheaper car insurance: If you own a car, then you must be aware that car insurance can be very expensive. There are many ways to lower your insurance premiums but you need to choose the one that suits your needs.
- If you are a safe driver, and seldom take your car out on the streets, then you might want to consider lowering the coverage. If you reduce the coverage, the insurance provider is less liable to pay for damages and thus can lower your auto insurance premiums.
- You could bundle up life, health, home, and auto insurance from the same insurance company to avail discounts on car insurance premiums.
- If you have a poor driving record or have driving infractions registered to your license, then you are car insurance rates are bound to go through the roof. To reduce the insurance premiums, you could opt for a defensive driving course to assure the insurance providers that you are not a risky driver anymore.
- Stop sharing your car with a teenager or a family member with a bad driving record, and remove them from coverage to save on secondary driver insurance.
- Always look out for cheaper options by comparing car insurance quotes online.
- If you have an auto company, invest in commercial auto insurance.
4.Know basic DIY maintenance tricks: Regular automotive services as well as brake services are essential in maintaining your vehicle. Servicing your car frequently can be an expensive affair. But neglecting the maintenance of your car could lead to major repairs that could cost you dearly. Thankfully, you can perform the following maintenance tricks by yourself to ensure that you save money on servicing while keeping your car in good shape:
- Change the oil frequently.
- Replace air filters every few months.
- Change the coolant.
- Check for corroded batteries. Clean the batteries instead of replacing them.
- Clean your headlights
5. Reduce gas consumption: In the era of rising fuel prices, it is essential to reduce your fuel consumption to save a few dollars on gas. Here are some tips to reduce your car’s gas utilization:
- Avoid overspeeding, sudden accelerations, and hard braking as these driving habits can decrease the car’s mileage drastically. It means more consumption of fuel and more wastage of money.
- Stop relying on the cool air of the air conditioner as it consumes a large quantity of gas. Lower the windows instead to enjoy the cool breeze.
- Keep your engines off when you are waiting for someone to board.
- Always check for deflated tires as they can impact the mileage of your car.
We love our cars. It is one of the most significant purchases that we do in our adult lives (second only to home). Now that we have seen how cars can provide us means to save money as well, we love them even more. It’s time to put our cars in the forefront of our budgeting efforts, and let them drive us to a better financial position.
