According to the 2013 “Your Driving Costs” study by AAA, the American Automobile Association, the overall cost of owning a vehicle went up 1.96% last year. The study takes a look at costs associated with vehicle ownership such as: fuel, maintenance, insurance, tires, and depreciation. Perhaps the rising costs of vehicle ownership is part of the reason that Millennials, also known as Generation Y, are not buying cars as much as their predecessors, and in fact, favoring more green alternatives, such as biking, walking, and utilizing public transit. However, if you don’t live in a community where it is convenient to walk to work or bike to the supermarket, you may be looking for some ways to trim expenses when it comes to your auto.
Obviously, the cost of fuel is not a factor that you can control. However, the type of vehicle that you choose can make a huge impact on the amount of fuel that you will need to buy. To save on gasoline, you may want to look at smaller, more fuel efficient cars. Hybrids and electric cars also help to increase fuel efficiency. When looking to buy or lease a new car, it can be helpful to check out the list of the most fuel efficient and least fuel efficient, as rated by the U.S. Department of Energy.
The older a vehicle gets and the more miles it travels, repairs are going to be necessary. These types of costs can be curbed, though, if you diligently follow suggested maintenance, such as regular oil changes, tire rotations, and fluid checks. These are relatively small expenses for maintenance that can save you, literally, hundreds of dollars in repairs due to lack of maintenance. Take advantage of coupons and specials to save a few bucks when going to a dealership service department or other auto shop.
Insurance can be quite costly and can vary greatly between companies. Some factors that go into the cost of insurance remain constant though.
- Cars that are more expensive to repair are going to cost more to insure
- Choosing higher deductibles can help to curb monthly costs
- Keep a good driving record; fewer accidents and claims means lower premiums
- Bundle insurance policies; having multiple policies with one company can qualify you for additional discounts
- Young drivers can lower insurance costs by earning good grades and not having a car in their name.
Everyone knows that as soon as you drive a new car off the lot, it is worth less. In order to avoid that hit in value, there are a few things you can do:
- Buy used car— With lease programs still being popular options, many good vehicles are returned to the dealerships after a few years with less than 50,000 miles on them. Often, you are able to buy an extended warranty up to 100,000 miles, making these much less expensive choices, but still back by the manufacturer.
- Take care of your car— Take your car for regular oil changes and tire rotations. Regularly wash your car, some environmental factors can actually be corrosive to your car’s paint over time.
- Drive your car longer— Most depreciation occurs when the car is new and decreases at a slower rate the older the car gets. Buying a car and trading it in after only two or three years can put you in a negative-equity situation, whereas, keeping the car and driving it for six or seven years allows you to pay off the auto loan and, typically, get past any negative equity.