Auto, Finance

Car Ownership Is More Expensive Than You Realize: 5 Tips to Reduce Out of Pocket Costs

How much does your car really cost you?

Off the top of your head, you can probably name your biggest vehicle-related expenses: lease or loan payments, insurance, fuel, maintenance. But these big-ticket expenses tell only part of the story. As we’ll discuss below, ditching the car ownership model altogether is in many cases a superior alternative to maintaining the status quo.

Even if you’re not willing to take that radical step, there’s plenty you can do to control your out of pocket vehicle expenses. Try these on for size.

1. Bundle Your Home and Auto Insurance

Start by bundling your home and auto insurance with the same provider, a move that’s virtually guaranteed to reduce your total annual premium. Depending on your length of tenure with your current provider, the value of your home (or renter’s insurance policy), the number of cars on your policy, and other types of insurance you’re carrying, your savings could be downright dramatic — hundreds or even thousands per year. And you don’t even have to ditch your car!

2. Ditch the Car Ownership Model Altogether

Of course, if you want to ditch your car, you’re free to do so. For city-dwellers, that’s easier than ever thanks to ride-hailing apps like Uber, car subscription services like D.C. entrepreneur Alex Perdikis’ Inride, and car sharing services like Zipcar (although car sharing availability is pretty limited in most major metro markets). Add in public transit and you should have no problem replacing your owner-occupied car trips with cheaper, more efficient travel.

3. Take Advantage of Safe Driving Discounts and Other Insurance Incentives

After bundling all your insurance policies together under a single plan, look for additional opportunities to save. One of the most widely available — and potentially lucrative — is the safe driving discount (or “good driver discount,” depending on the insurer), which rewards you for observing the rules of the road and avoiding accidents. The most dramatic safe driving discounts require you to install monitoring technology in your vehicle, so you’ll want to think twice if you have any privacy concerns.

4. Combine Trips Whenever Possible

Draw up daily car trip plans and stick to ‘em. There’s no reason you can’t hit the grocery store on your way home from work, to cite just one common example.

5. Use a Fuel-Finder App

If you drive a lot, small fuel price differences can really add up. Use a dependable fuel-finder app to find the cheapest gas within reasonable driving distance from your home, workplace, school, and so on. Make a list of your new favorite gas stations and remember to fill up when you’re in the area.

Spend Less, Drive Smarter

These aren’t the only steps you can take to reduce your car ownership costs. One thing not mentioned here is pretty boring: following your manufacturer’s recommended maintenance schedule to the letter. Whatever you’ll have to spend to keep your checkups and top-offs up to date will pale in comparison to the hit you’ll take from a premature transmission replacement (or similar).

Ultimately, your goal should be to spend less and drive smarter. Sounds easy enough. Are you up to the challenge?