With the exception of housing, many couples’ biggest expenses are tied up with their cars. Besides paying for gasoline, cars usually require regular maintenance, and perhaps a car payment for a loan. The good news is with a little bit of effort you can make owning your car less expensive.
Here are 3 tips to lower your car costs this summer:
1. Find a Better Deal on Car Insurance
While we don’t switch every time our car insurance is up for renewal, checking the competition’s rates has allowed us to get the best value for our premiums. In fact, we used the money saved to help us pay off our car loan faster a few years ago. Switching to another company cut our bill in half!
When comparing prices make sure that you get them to match the current coverage you have, so you’re having an apples to apples comparison You can also ask to see if moving your home insurance with the company can save additional money by bundling. That’s not always the case, but sometimes you can lower both of your insurance bills that way.
2. Driving? Save Money on Taxes
If your job requires that you to drive your vehicle, make sure that you track your mileage, as it may be tax deductible. For 2013 the standard rates for mileage are:
- Driving required for business, you can deduct 56.5 cents per mile
- If you are moving, you can deduct 24 cents per mile driven.
- If you are driving for a charitable organization, you can deduct 14 cents per mile
Make sure you have your receipts and records for your mileage to make it easier when you file your taxes.
3. Buy Your Next Car With Cash
While you may be stuck with a car payment now, you may be able to get your next car without a loan. We have done this when replacing the family car and for my husband’s commuting car and it worked out well for us. Not having car payments has meant that the money saved can be redirected to pay down debts, invested for retirement, and used for our house.
My suggestion is to start small and allocate a portion of your paycheck (perhaps half or a quarter of your car payment) into a car fund using a high interest savings account at a bank or credit union. For us, online banks have provided the best rates and they are easy to transfer to and from with our current bank accounts. Having the higher rates allowed us to earn money faster than keeping it at a local branch where it was simply earning pennies each quarter.
Keep your current car for as long as possible, avoiding the temptations of trading in your 3 year old vehicle for the latest model. As you get closer to having enough money saved, start looking around at local sellers and dealerships with a reputation for good value.
Thoughts on Saving on Your Car Bills
I’d love to hear from you about how you handle your car. How do you save on your car expenses? Have you been able to find a good deal on insurance? Do you plan on saving up for your next car? What are your goals for this year with your transportation expenses?