11 Ways To Cut Costs on Your Monthly Car Expenses

Cars are convenient but can also be expensive to maintain. An AAA report released in 2022 revealed that the annual cost of ownership for a new car is $10,728. That figure includes insurance, gas, maintenance, and loan interest. Although these figures were an estimate for a new model, driving an older model means you may also have to account for car ownership costs. 

Fortunately, it’s not all dark and gloom. There are ways to reduce the strain on your wallet and make your car ownership journey enjoyable.

Here are 11 ways to cut costs on your monthly car expenses. 

Stick to a Maintenance Schedule

Foregoing maintenance only leads to more expensive repairs in the future. You can reduce these expenses by following the tour maintenance schedule outlined in the owner’s manual. A well-maintained car reduces frequent repairs and uses less fuel, saving you more money in the long run.

Avoid Aggressive Driving 

The U.S. Department of Energy estimates that aggressive driving tactics like hard braking, quick acceleration, and speeding can lower fuel efficiency by up to 30% at highway speeds and up to 40% in stop-and-go traffic. Good driving habits and reducing your use of heating and AC can help you cut down on fuel costs.

Driving responsibly also prevents wear and tear, saving you money on car repairs. 

Opt For Annual Insurance Premiums as Opposed to Monthly

You can reduce your insurance premiums by paying yearly instead of monthly premiums. Some insurance providers are willing to negotiate and offer a lower rate if you install a system to record data on your driving habits. 

Find an Affordable Insurance Provider

Keeping up with insurance premiums can strain your finances significantly if your premium exceeds $100 a month. Comparing car insurance quotes from different providers can help you settle for a better rate and save hundreds of dollars annually.

Carpool To Work

You don’t have to drive to work every day, especially if you have colleagues using the same route. Check if it’s possible to carpool to work, as this will reduce your fuel and maintenance costs. Carpooling also reduces the vehicle’s annual mileage, which could give you a better insurance premium. 

Consider Downsizing

Downsizing to one car if you own two as a household can help reduce your fuel and maintenance costs. Opting for a smaller, more efficient model if you’re driving a big vehicle will also help you save money in the long run.

Take Advantage of Credit Card Rewards

You can reduce fuel costs by swiping your credit card at the pump. Some cards offer up to 5% cash back on fuel, which can further save you money.

Don’t Forget About Regular Oil Changes

Experts recommend changing the oil every 3,000 miles. Review your owner’s manual to learn when to change the oil and how often to check oil levels. 

Learn Basic Car Maintenance

Learning the basic functionality of your car can save you money. Checking and filling your oil, adjusting air pressure, or replacing your air filters are all simple things you can learn to reduce car maintenance costs.  These basic repairs will also reduce premature mechanical failure, thus reducing the need for multiple repairs every month.

Refinance or Pay Off Your Car Loan

Car loans can be stressful and strain your monthly budget. Come up with a plan to pay off your auto loan or consider refinancing.  The former works best if you’re dealing with a high interest rate. You can shop around for a better rate to reduce your monthly costs and allocate the extra money towards the principal amount.

However, if your income allows, you can focus more money on your balance to clear your car payment.

Switch to a Hybrid or Electric Car

Conventional cars are expensive to maintain, especially in terms of fuel costs. AAA reports that traditional car maintenance can cost up to $1279, which is higher compared to $949 for electric vehicle maintenance. Although EVs and hybrid cars are expensive, buying one could save money. 

Cars are necessities, but they can strain your finances if you’re not careful. By evaluating your monthly car expenses, such as the frequency of repairs, fuel costs, insurance premiums, and car loans, you can determine the next steps to take to reduce them.

Accounting for these expenses in your budget and following our tips above, you can better manage your car expenses and enjoy your car more. 

Read More: