Downsizing is a common phrase many Americans have heard and are a bit intimidated by. Downsizing is a way for business and corporations to lower their out of pocket expenses and improve their profit margin ratio. The “size” is typically attributed to a reduction in quantity, and for businesses, it represents the work force. Not all downsizing is bad, as consumers can embrace that philosophy and downsize on a new car to reduce expenses all around.
Downsize on Fuel
Depending on your new car choice, downsizing your vehicle is a way to lower your monthly payments, reduce your fuel consumption and even lower auto insurance rates. Consider if you are an owner of a large pick up truck – if you do not need that type of vehicle for work purposes, then downsizing your car to a more fuel efficient SUV, sedan or smaller pick up will save you money at the pump. With the oil market fluctuating so unexpectedly and the next spike in gas prices looming around the corner, saving money on fuel costs is a great way to save money.
Downsize on Auto Insurance
Another way downsizing can save you money is on insurance costs. Perhaps you have a brand new car and may be paying sizable insurance premiums to finance it. If you opt into buying a new but pre-owned vehicle or even a car that is less of a “status symbol,” hundreds of dollars can go into your bank account as opposed to the insurance provider.
Downsize on Auto Loan Payments
Downsizing your car can also help lower the costs you have to pay monthly for your car financing. If you purchased and are financing a car with a large sticker value, a less expensive car will cost you less money per month. If you are up to date on your car payments and have more equity in the vehicle then you owe, you are in a great position to downsize and benefit from all-around greater savings.