Top 5 Ways to Save Money When it Comes to Your Car
Nearly everyone has a car at a very young age, but there is a lot to learn about what to do or not to do when it comes to your car. Since your car is a depreciating asset, it is important to make the right decisions when buying a car, maintaining your car, and insuring your car. As soon as you take your car off the lot, it immediately loses about 20% of its value, so it is not necessary to invest a lot of money into a car. Here are some tips that will help you save money when it comes to your car.
- Buy what you can afford. It is worth saying it again: a car is a depreciating asset. You car can never make you money, at least no where near the money you put into it. It is better to buy that car that won’t get much attention from your friends, but will save you money in the long run.
- Go for a newer used car. Buy a car that is only 1 or 2 years old, with less than 10,000 miles on it. This way you can get a car that is still in good shape without paying the extra money for it.
- Do not lease a car. When you lease a car you will never be able to free of a monthly car payment. You also have a mileage limit that could cost you extra money if you go over. And if there are any scratches or dents, that also could cost you more money. Bottom line: it’s just not worth it. Finance a car for 3 to 5 years. Then save the monthly payment once it’s paid off by driving your car as long as you can.
- Increase your insurance deductible. This is an easy way to see an immediate savings on your premiums. Increase your $250 or $500 deductible to $1000. Your Car insurance is meant to pay for major accidents, not minor scratches and dents. Use the money out of your emergency fund to pay for the higher deductible.
- Keep your car for longer. The longer you drive your car the more money you save by not having a car payment. For some people that could mean saving up to $300 per month. You can use the extra savings to pay off debt or apply to your retirement fund.
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