If you’re like most people, you rely on a dependable vehicle just about every day. Your car gets you to and from work, helps you run errands and take care of personal needs, and even takes you to exciting destinations. It’s no secret that owning a car requires a significant financial commitment.
Not only do you have to focus on saving for a down payment to purchase the car and then make monthly payments if you finance, but there are other costs as well. You can spare yourself a lot of stress and keep more of your hard-earned money by making good choices and being a responsible owner.
Pick a Good Insurance Plan
In most U.S. states, auto insurance is required. It protects you from liability in the event of an accident and covers costly repairs. Many companies are vying for your business. Reading online reviews can help you make the right choice. Look for plans with affordable premiums and a deductible you’re comfortable with.
A good rule is to know that the higher your monthly premium, the lower the deductibles, and vice-versa. You also want a responsive insurance agency that communicates well and offers discounts. Not all insurance companies are equal, so comparing multiple options will help you choose wisely. By finding a plan that fits your budget and has good coverage, you can save money now and in the long term.
Get a Warranty
When you purchase or lease a new car, it will come with a manufacturer’s warranty. This will cover repairs and replacements of major parts and components, such as the engine, transmission, electrical system, and exhaust. The coverage usually lasts around five years or 50,000 miles, whichever comes first. Once it expires, it is wise to get an extended warranty.
Purchasing a warranty can save you money in the event of major repairs. Instead of having to pay a mechanic hundreds or even thousands of dollars to fix a problem or replace a part, your warranty will cover it at no additional out-of-pocket cost. An extended warranty is especially a good choice for older vehicles, which are more prone to breaking down and having an assortment of mechanical issues.
Keep up With Maintenance
Eventually, parts will wear out, and systems will start to falter. You can extend the life span of your vehicle and avoid extensive repairs by properly maintaining your vehicle. Spending a little bit now on upkeep, such as oil changes, tire rotations, filter replacements, and transmission flushes, can prevent you from spending a lot more later on. Maintaining a car will also contribute to more efficient gas mileage, which will save you money at the pump. Follow the recommendations on your owner’s manual to see when which items need service. Also, never put off the need to make repairs. Letting a small issue get worse will only result in a bigger bill at the mechanic’s shop.
Put More Money Down
Buying a car with cash and owning it outright will save you money in the long run, as you won’t have to pay interest on financing. However, if this isn’t an option, getting an auto loan is your next-best bet. In doing this, consider putting more money down before you sign the paperwork and drive off in your new vehicle. The larger your down payment, the less your purchase price and monthly payments will be. You might even be able to get a lower interest rate. Over the life of your loan, you will spend less out of pocket than you would be making a lower down payment.
Think About the Term and Rate
If you are financing your vehicle purchase, you may have the option to choose the loan term. Many lenders will offer terms between 36 and 72 months. A longer-term will make your payments smaller; a shorter term has larger payments. However, be aware that a shorter-term will also come with a lower interest rate, making your total payments over the life of the loan less.
Buying a car is one of the most significant purchases you will make. Considering you use your car daily, you need to make wise financial choices. These guidelines will help.