For many Americans, buying a car is among the most expensive purchases they will ever make. And car prices are on the rise.
According to Kelley Blue Book, the average cost of a new car as of March was $48,008, representing a 3.8% increase in transaction prices over the prior 12 months.
Unfortunately, it’s not just the cost of the car itself that will set you back a pretty penny; the maintenance, insurance, gasoline and other aspects of car ownership also factor in. According to AAA, Americans are now paying an average of $12,182 to own and operate a new car.
What are some ways to make owning a car in the U.S. cheaper? Let’s dig in.
Go for Fuel-Efficient Cars
Opting for a car that ranks well on fuel efficiency can help you save so much money. According to J.D. Power, the average American spends $150 to $200 on gas every month, and families spend approximately $5,000 on gas annually.
If you pay $4 per gallon of gas and your car gets 20 mpg, you’ll spend $2,000 on gas over the course of 10,000 miles. But if your car gets 25 mpg, it would cost $1,600 to cover the same mileage, representing a savings of $400.
Gas-only cars that rank highly in fuel efficiency include the Mitsubishi Mirage, the Hyundai Elantra and the Honda Civic, according to Cars.com. Hybrid cars, which are partly electric, will get you much further on far less fuel. The Toyota Prius and the Toyota Camry Hybrid are examples of strong players in the hybrid space.
But, of course, the best cars for fuel efficiency are the cars that don’t need gas. Electric vehicles (EVs) can require more money up front, but they render substantial savings in the long run.
Don’t Skip Routine Maintenance
If you’ve bought a car from a dealership, you’re probably used to receiving emails about routine maintenance needs like getting your tires rotated, oil changed, etc. Completing such tasks can feel like an added chore on top of an already busy life, but making time for car maintenance is critical in saving money. Skipping regular service appointments can result in costly repairs later on down the road. Nip these in the bud by following the rules around keeping your car healthy.
Learn Your Vehicle
Cars can be complicated, but there are so many ways to learn about how yours operates (YouTube, for instance, provides a wealth of information and tutorials). It’s worth your time to get to know your car and how to do safe fixes and checkups yourself.
There’s a lot of kerfuffle out there about how auto mechanics can easily rip off consumers. You can avoid this by having a more thorough understanding of how your car operates and what it needs to run smoothly.
It’s not recommended to DIY anything major; but, if you understand the basics, you can ideally stave off visits to the mechanic more frequently, as well as know how much a repair should cost, as opposed to what the mechanic just tells you it costs.
Shop Around and Compare Auto Insurance Policies
Auto insurance is a world unto itself. It’s all too easy to skip doing much research here and just go with the first provider you connect with, but put a little more work into the process to reduce the costs of car ownership.
Insurance costs vary by location, and some states are notably more expensive than others (Michigan is especially pricey, whereas Vermont is known to be far cheaper).
To save costs on car insurance, not only should you shop around for the best rates, you also should compare insurance costs before purchasing a car, if possible. This could help you save money because insurance premiums are based in part on the car’s price, its safety record and how much it costs to repair. It’s also critical to maintain a good credit score, as this will affect your rates, too.
Use OEM Spare Parts
You can reduce the cost of car ownership by opting for original equipment manufacturer (OEM) parts. OEM parts can be anything from side mirrors to headlights. Seek these parts from reputable sellers and be wary if the price is too low, as that suggests it’s faulty or just plain subpar.
Keep Your Car Aerodynamic
Sounds like advanced physics, right? Well, that’s because it is! But keeping your car aerodynamic is important as it lessens the guzzling of fuel. Fortunately, this is pretty easy to do, and, in the long run, can help reduce the cost of car ownership because it lessens your car’s resistance to winds, which makes it run more smoothly.
To keep your car aerodynamic, don’t clutter it with extra hardware. For example, that roof rack may be very useful, but don’t put it on when you don’t need it as this can drag down the car’s weight and make it drag more. You want a machine that moves easily through space and time. It’s also helpful to roll up windows and use A/C instead.
Pay in Cash
OK, so this isn’t necessarily feasible for everyone, especially those barely getting by, but if you pay cash for your vehicle you can save a ton by avoiding interest fees. This is especially important to try to do right now. The average auto loan interest rates across all credit profiles ranges from 5.07% to 14.18% for new cars and 7.09% to 21.38% for used cars, according to MarketWatch Guides.
You’ll save so much money by ditching the auto loan altogether and paying in cash for your car.
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