20 Things You Can Do to Keep Your Car Costs Low

Cars are expensive. We currently have a family of five with one parent working outside the home and the other parent working at home with occasional need to go elsewhere. Thus, we have a small commuting car for the commuter (a Toyota Prius) and a large vehicle for transporting the whole family (a Toyota Sienna).

Naturally, we want to minimize the expense of automobiles in our life while not taking away from what they’re truly useful for, which is transporting people and small amounts of goods from place to place. The less the impact of cars on our finances, the better.

It’s worth noting that one major “car cost” I’m including here is depreciation and shortened lifetime of the car. If you can take simple steps to slow your car’s depreciation and extend the lifetime of the car, that’s a significant savings. It might not show up on your monthly budget right now, but there will come a time where you aren’t facing repairs or replacements, and that will have an enormous positive impact.

Thus, what I am most focused on is reducing the cost of your automobile and associated expenses over the course of an average year. This includes improving fuel efficiency, extending the life span of the car, and reducing the likelihood of expensive repairs.

Here are 20 things I do to achieve that goal.

Buy Late Model Used

Late model used cars – cars that are between two and six years old when you buy them – tend to be the “sweet spot” for getting maximum value out of a car purchase, assuming you’re following most of the other strategies in this article. You’re typically getting about 80-90% of the lifespan of a car for about 60-70% of the original price.

Typically, late model used cars pop up at dealers when people who are effectively renting their cars via a lease program decide not to buy the car after the lease (this typically happens when people just want to jump back into a brand new car and make lease payments forever). It’s harder to find late model used cars outside of dealerships, but they can be found.

Aim for a car with a model year that’s two to five years earlier than the current year.

Buy With Reliability and Fuel Economy in Mind

The biggest features you want to look for in a car that will produce the most value for you are reliability and fuel economy.

With fuel economy, you can look at the hard data and see how many miles per gallon a car gets. Divide 15,000 (assuming that’s how many miles you drive in a year) by the fuel efficiency, then multiply that by $3 to see roughly how much the fuel in a vehicle will cost you. For example, a 20 mpg car with that formula will cost you $2,250 in fuel over the course of a year, whereas a 25 mpg car will cost you only $1,800 over the course of a year. That’s $450 in savings for each year you own the car.

For reliability, the best tool you have is to look at reliability data for different car brands in Consumer Reports. Look for cars that have great results in their reliability surveys. You can find old issues of Consumer Reports at the library – look for reliability data in the last few annual car issues. Typically, Toyota, Honda, and Nissan score fairly well, but there is a lot of variability there.

Drive It Until Repair Bills Start to Build Up

Once you have a car, keep driving it until repair bills are starting to become a serious problem. Personally, I tend to wait until I begin to no longer feel confident that the car can reliably take me where I want to go without facing a significant chance of breakdown and major repairs.

Whenever you take your car to a mechanic for maintenance or repairs, ask the mechanic to assess your car and tell you whether or not significant repairs are coming down the road. If the total upcoming repair bill is adding up to more than the vehicle is worth, it’s probably time to move on to your next car.

Speaking of a mechanic…

Have a Trusted Mechanic

One of the most valuable things that a car owner can have in their life is a mechanic that they trust, both in terms of quality workmanship, but also in terms of true, honest advice. If you find such a mechanic, stick with that person.

In general, a mechanic that has worked on your car several times and has worked on your cars in the past with good results is worth a little more than whatever the cheapest mechanic in town is. There’s nothing wrong with shopping around for a major repair, but the work and advice of a trusted mechanic will save you a lot of money over the long run.

When you go in for maintenance and repairs, take advantage of that situation and ask lots of questions. What major repairs or replacements are coming in the future? Is it time to sell or replace your car? A good, honest mechanic will give you good answers to such questions, and that relationship is worth preserving.

Keep It Clean (Especially in Winter)

Dirt, dust, and other substances will eventually have a negative impact on your car, causing wear and tear and rust. One particularly nasty substance on your car is salt; while it’s essential for driving in winter conditions, it can really do a number on your car’s body and undercarriage.

The best thing you can do for preserving and extending the lifespan of your car, particularly if you’re often driving on gravel roads or are exposed to salt in the winter, is to wash your car thoroughly on a regular basis. You can do this yourself at home for very little cost, or you can take it to a car wash and have machines or a service professional handle it. In any case, getting those substances off of your car will directly extend the lifespan of your car.

Do Small Maintenance Yourself

Cars require maintenance, and the more maintenance tasks you’re willing to do yourself, the better.

Try starting by tackling small tasks like replacing windshield wiper blades and windshield wiper fluid yourself. As you feel more confident, you can move on to bigger tasks like oil changes, and even into full-fledged repairs. It can be quite fun and surprisingly relaxing.

Youtube is a wonderful tool for instructional videos on how to perform all kinds of maintenance tasks for your car. They’ll show you, step by step, how to do almost anything you’d want to do with your automobile.

Stick to the Maintenance Schedule

The manual for your automobile contains a lot of useful information, but few pieces are more useful than the maintenance schedule.

A maintenance schedule tells you what maintenance should be done to your automobile at every different odometer reading, typically every 5,000 miles.

Follow that schedule. As noted above, it’s worthwhile to do at least some of the tasks yourself if you can, as it saves money and can be a nice pastime. Even if you’re taking everything to a shop, though, make sure that the shop is following the schedule. Know what maintenance you’re due for each time you go in and make sure to check that the maintenance was completed.

Keeping your vehicle properly maintained will significantly extend its lifespan. It might be a little expensive to keep up with that schedule, but you’ll earn your money back and more by sticking with it. Plus, this gives your mechanic a regular opportunity to check out your car and identify any potential issues that can be fixed early before they become a major problem.

Keep the Tires Properly Inflated

Once a month, it’s well worth your time to check the pressure in each of your tires and inflate them to the maximum recommended pressure. This is a very easy task to do at a gas station with a free air spigot. It takes just a few minutes and the only thing you need is a $1 tire pressure gauge.

Every 2 PSI that your tires are below their maximum recommended limit reduces your car’s fuel efficiency by 1%. Tires do slowly seep air over time, so if you don’t do this at all, your fuel efficiency will gradually decline, which means you’re filling up with gas more frequently. Given that this task is so quick and so easy, it’s a great thing to do when you’re at a gas station and your kids have to go inside to use the bathroom (not that I’m speaking from experience there or anything…).

Buy Inexpensive Gas (and Track Efficiency)

Getting the most mileage for your fuel dollar is a great way to save money. If you can get 11 miles out of a dollar of gas rather than 10, then that’s going to add up to a ton of savings over the course of a year.

The first step in this process is gaining an understanding of how efficiently your car runs on various types of fuel available in your area. For example, our Sienna gets far worse gas mileage when it uses 87 octane fuel with a 10% ethanol blend than it does with 91 octane with no ethanol. However, the ethanol gas is much, much cheaper per gallon, so knowing which one is actually giving me the most mileage for the dollar is important. (Believe it or not, it seems to be the more expensive 91 octane fuel, by my measurements.)

Once you know what fuel works best in your vehicle, the next step is to find the cheapest option for your gas. For us, that generally means buying it from the local warehouse club, as the prices there are consistently $0.07 to $0.10 per gallon cheaper than other places. We also stack up points on our Fuel Saver card when we shop at HyVee (a local grocery chain that has a customer rewards program for fuel discounts), so once a month we’ll get gas at another station to use all of those Fuel Saver points on a single fill-up.

Combining those elements, we spend substantially less on gas than if we didn’t pay attention to those things. The savings doesn’t appear all at once. In fact, what actually happens is that I fuel up fairly infrequently but when I do it’s expensive. Over the long run, though, the average per mile is as low as I can get it, and that adds up.

Park in the Shade in the Summer

If you want to watch your fuel efficiency fall through the floor, one way to do that is to run your air conditioning full throttle in an effort to cool off your car on a hot day. This simply burns through the gas, and that means more frequent trips to the gas station.

One free way to reduce this cost is to park in the shade whenever possible, even if it’s a little farther from your destination. If I’m parking in a city block, for example, I’ll park on the side that’s going to be shaded even if I have to walk a little farther. If I’m visiting a friend, I try to park in the shade of a tree or of nearby houses.

On a hot day, this can make an enormous difference in terms of the interior temperature of your car, which means that there’s less time spent running the air conditioning, which means that there’s less fuel consumed, which means more money in your pocket.

Don’t Idle

Letting your car sit while running is not only a waste of fuel, but it also adds unnecessary wear and tear to your car. Cars simply aren’t designed to idle for extended periods of time; they can do it, but it just adds unnecessary stress.

If your car is going to sit for more than 30 seconds, you’re far better off putting it in park, turning off the ignition, and waiting until you’re ready to move again. This will cut down on unnecessary fuel use, plus it’ll benefit the lifespan of your car.

Minimize Your Weight

The less weight you carry in your car, the better. Every 100 pounds of extra weight in your car reduces your fuel efficiency by 1-2%.

There are times where the extra weight can be helpful, such as driving on an icy road, but most of the time, the excess weight just burns fuel, which then burns your money.

In short, don’t use your car for extra storage. Instead, find a place to store your stuff that isn’t being constantly hauled around at the expense of fuel.

Carpool or Take Mass Transit

If you have an opportunity where you can easily share a ride with someone to work, take advantage of it. Even if it eliminates just a day or two of commuting a week, that’s a day or two in which you’re not spending money on fuel or putting miles on your car. For years, my wife shared a ride four days a week with another teacher who lived about a mile from us, and it saved tons of money on fuel and maintenance and depreciation.

Similarly, if you have an opportunity where you can easily take a bus or a train or a subway to work, take advantage of it as many days as you can. If you’re going more than a few miles, mass transit is almost always less expensive than the cost of fuel and maintenance and wear on your car, plus you can spend the commute reading or doing other things that you might be unable to do while driving. I did not have a car for the first year of my professional life because I simply caught the bus to and from work and I got groceries at a grocery store about half a mile from our house (using a bicycle with a basket on it).

Minimize Your Commute

If you do have to commute by yourself each day in your car, look for any and every opportunity to minimize it. Make sure that you’re truly driving the most efficient route to and from work, the one that puts minimal miles on your car. That will save on fuel and maintenance and depreciation. If you can cut an 11-mile commute to 10 miles each way, and you work 50 weeks a year, 5 days a week, you’re saving 500 miles on your car. That’s more than a full tank of gas and a sizable step toward most maintenance tasks.

Furthermore, if your job allows it, take advantage of opportunities to work from home. Those days put zero miles on your car, which means no fuel costs and no extra miles, either.

Drive the Speed Limit

This is a huge money saver, for multiple reasons.

First of all, if you’re driving the speed limit, you’re not going to get speeding tickets. Speeding tickets are not only expensive by themselves, they also raise your insurance rates.

At the same time, speeding is generally terrible in terms of fuel efficiency. When you speed, you’re often driving faster than the optimum speed of your engine, which is usually around 55 to 65 miles per hour. Above that, fuel efficiency drops rapidly.

Speeding rarely gains you significant time on a trip, anyway. When you’re driving through a city and stopping frequently, speeding saves barely any time at all. If you’re on the interstate, speeding might gain you five to 10 minutes per hour of driving, but then you’re refueling much more frequently, which means that at least some of that time advantage is lost at the pump.

Simply drive the speed limit. You’ll save money and you won’t lose much time at all.

Shop Around for Auto Insurance Regularly

Auto insurance rates vary quite a bit from company to company, and companies often offer great rates to attract new customers from other companies.

Take advantage of that. Once a year or so, shop around for auto insurance. See what other rates are available from major insurers and see if they top what you already have. It doesn’t hurt to shop around a little.

If you can cut your current rate a little bit or maintain a low introductory rate, the 15 minutes of effort in shopping around will save you hundreds.

Raise Your Insurance Deductible

Another approach to consider when cutting back on the money invested in your automobile is to look at raising your auto insurance deductible.

Your deductible is the portion of an expense that you have to pay out of pocket before the insurance begins to cover the rest of the expense. So, a $500 deductible means that you pay the first $500, a $1,000 deductible means you pay the first $1,000, and so on.

The higher the deductible, the lower the premium (the amount you pay as a regular bill to keep insurance on your car). Thus, if you rarely have an accident and don’t have risky drivers on your insurance, a higher deductible might really pay off for you, especially if you can easily afford that deductible.

Hold Off on Teen Drivers

If you have a potential driver approaching their sixteenth birthday, consider waiting on buying that child a car. A car in which that child is the primary driver is going to hit your auto insurance hard, plus there’s the additional expense of another car to keep filled with gas, maintained, registered, and so on.

If you can wait a couple more years before giving that child a car of their own – perhaps when they leave for college – not only will the insurance cost be less intense, you’ll also avoid a couple of years of fuel and maintenance on a car.

If You Must Get a Car Loan, Get Pre-Approved by Another Bank Before Shopping for a Car

The best way to pay for a car is to pay for it in cash, but that’s often not something people are prepared to do immediately when they need a car. Paying in cash for most Americans requires some careful planning.

Thus, if you’re going to buy a car and you know you’ll need a loan to do so, get pre-approved for a loan first from your preferred bank or credit union.

That way, when you go to the dealership and they start talking to you about financing, you actually have another option in hand to compare their offer to. If the dealership can beat your offer, then you’re good; if the bank’s offer beats the dealership’s offer, you’re also good.

A preapproved loan can also enable you to buy a car privately, if you find the right car that way.

Start Saving for Your Next Car the Day You Pay Off Your Current One

As noted earlier, the best way to get maximum value out of a car is to buy a late model used car and keep driving it until repair bills build up. This means that, theoretically, there should be a several year period where the car is paid off and you’re still driving it.

Take advantage of that period. When your car is paid off, start making “payments” to a savings account to pay for your replacement car.

Let’s say that you fully own the car without a loan for seven years, and during that period you save $200 a month, you’ll have about $17,000 in savings when you’re ready to buy your next car. That will buy a nice late model used car for commuting. Save $300 a month and you’ll have over $25,000 in savings, which could buy a late model used van or SUV.

At that point, you should keep saving, but you can actually trim the amount you’re saving each month.

What’s good about this? Well, you’re not going to be paying any interest on a loan, for starters. Rather, you’ll be earning interest in a savings account. You’ll also be free from the need to get loan approval when it’s time to buy a car, and it won’t be a sudden financial burden.

Final Thoughts

There are many ways to save money on your car, from the initial purchase to maintenance, from good driving habits to the insurance package. Some of them have an immediate impact, like making sure your tires are inflated and buying inexpensive but efficient gas, while others save over the long haul, like buying a fuel efficient and reliable car. Used together, they can produce an incredible amount of savings over time, on the order of hundreds of dollars a month for a heavy driver.

Pick and choose from these strategies and use the ones that work well for your situation. Even doing one or two things will have a real impact.

Good luck!

Read more by Trent Hamm:

Trent Hamm

Founder & Columnist

Trent Hamm founded The Simple Dollar in 2006 and still writes a daily column on personal finance. He’s the author of three books published by Simon & Schuster and Financial Times Press, has contributed to Business Insider, US News & World Report, Yahoo Finance, and Lifehacker, and his financial advice has been featured in The New York Times, TIME, Forbes, The Guardian, and elsewhere.