A tightwad’s 10 tips to trim car costs

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With gas prices zooming up and down like a roller coaster and financial cutbacks continuing, many drivers are looking for ways to save a few bucks.

Whether it’s reassessing your insurance needs, reducing fuel consumption or simply putting off that new vehicle purchase for another year, here are 10 good ways to save money behind the wheel.

1. Drive your car longer. The easiest way to save money on your vehicle is to simply drive it longer, and with the current economic climate, more Americans have been doing exactly that. In 2005, a survey by AutoPacific of 32,000 consumers found that 46 percent of respondents would not be shopping for a new vehicle in the next four years. This year, that number has risen to 59 percent.

Many consumers typically replace a vehicle every three to five years, but today’s vehicles are built to last longer, and some manufacturers offer up to 10-year warranties. According to Edmunds.com, the average monthly payment on a new vehicle is $479. Considering your existing car is trouble-free, saving that $479 per month means an annual savings of $5,748 by postponing the purchase of a new vehicle.

2. Reassess your insurance needs. Adjusting the insurance you’re carrying can dramatically reduce the amount of insurance premiums you pay. According to Bob Sullivan at MSNBC.com’s The Red Tape Chronicles, raising the deductible from $200 to $1,000 on a comprehensive insurance policy will save an average of 40 percent or $100 per year on the comprehensive portion. Those with older cars may want to consider dropping their comprehensive and collision coverage also. Consumer Reports recommends dropping the coverage if the annual auto insurance premiums are 10 percent or more of the book value of the vehicle.

3. Skip the accessories at the dealer and buy after-market products. From sound systems and alarms to wheels and roof racks, auto manufacturers offer a variety of accessories and upgrades for new cars. Dealers often tack substantial markups on their accessories and consumers can usually save up to 50 percent or more by buying after-market accessories on their own. For a 2009 Honda CR-V LX, a portable NAVI navigation system from the dealer adds a whopping $710 to the bill while a similar after-market product can be had for less than $300.

4. Buy pre-owned cars. The old saying that a car loses a large chunk of its value once it drives off the lot is true. When you purchase a brand new car, you pay the retail price, but as soon as it leaves the lot, the car is only worth the wholesale price, the amount the dealer would pay if you were to sell it back to them. In many cases, that difference is up to 20 percent and on average, a vehicle typically loses 15 to 20 percent of its value each year. Buying a pre-owned vehicle can save thousands of dollars by letting someone else take that initial depreciation hit. Many manufacturers also have “certified pre-owned” programs that take the risk out of some used cars by offering extended warranties and putting the vehicles through rigid certification tests.

5. Buy what you can afford. Buying more car than one can afford is perhaps one of the biggest ways that consumers waste money on their vehicles. Conspicuous consumption often leads many to drive fancy cars at the expense of savings, retirement funding and debt management. Experts typically recommend not spending more than 20 percent of after-tax household income on all vehicles in the household. So an adult with a take-home pay of $50,000 per year should spend no more than $10,000 per year for car payments, insurance, gas and maintenance. If you calculate that each year you will spend $1,804 for insurance, the average national insurance premium according to the CarInsurance.com Premium Index, and $3,000 for fuel and maintenance ($250 per month), your total annual car expenses would be $4,804. That would leave you only $5,196 of the original $10,000 limit for car loan payments — or $433 a month. Bankrate’s auto loan calculator shows a monthly payment of $433 a month for 48 months at a current auto loan rate of 7.25 percent equates to a loan amount of $17,994.

6. Do some of your own maintenance. Rebuilding an engine or changing out a transmission can be a serious job requiring lots of knowledge and experience, but checking tire pressure and fluid levels isn’t very difficult. Performing those basic maintenance duties and having the ability to change a flat or jump your own vehicle in times of emergency can dramatically cut down on maintenance expenses. While the average cost of an oil change at a shop can run anywhere from $30 to $100, you can buy the oil and filter at an auto parts store for $10 to $25. Learning how to change your own oil and keep fluid levels up can save you hundreds of dollars each year.

7. Do your homework before you visit a dealer. The availability of information on the Web has brought a tremendous amount of transparency into the business of buying and selling vehicles. Automotive Web sites such as Edmunds.com, KBB.com and NADA.com can help consumers understand whether they’re getting a good deal or not when they wrangle with a salesman. When you’re ready to sit down with a dealer, you should already be anticipating the numbers they’ll be working with.

8. Reduce fuel consumption. Driving a gas guzzler with a lead foot is guaranteed to bring some hefty fuel costs into your life. You can dramatically reduce your gas consumption simply by maintaining your vehicle and driving in a sensible manner. According to “hypermiling,” using driving techniques that maximize fuel economy, expert Wayne Gerdes of CleanMPG.com, drivers can increase their fuel efficiency 15 to 20 percent simply by checking their tire pressure and mildly altering their driving habits. Other tips include reducing your speed, avoiding stop-and-go traffic and consolidating trips and errands.

9. Shop around for insurance rates. Even after you’ve reassessed your insurance coverage, shopping around for new rates once every year or two can save money in premiums. In some states there are upward of 200 auto insurance companies in operation and each can have different premiums depending on the vehicle you drive, the coverage you need and your driving record. The changing nature of the insurers and their appetite for risk also means that certain companies may offer different rates at different times.

10. Don’t let gimmicks cloud your judgment. Dealerships have long used gimmicks such as free cruises and “gas for a year” giveaways to lure people onto their lots or into a new car. Before you jump at that opportunity, calculate exactly how much that really means to you, based on the number of miles you drive and the cost of gas in your area. And then explore what other rebates, incentives or low prices you may have to pass up in order to get that $500 or $600 worth of gas. The perception of a freebie can cloud the fact that you might be able to get a better deal on a vehicle elsewhere. Manufacturers also use gimmicks such as warming cup holders, back-up cameras and storage compartments to differentiate their vehicles from the competition. While there may be nothing wrong with these accessories, they can often convince buyers to spend an extra thousand dollars for a product that is only worth a hundred. Staying clear of the hype and buying your vehicle based on its price and reliability can save you more money in the end.