The best way to save money on car expenses is to sell your car, tear up your drivers license and never leave your house. End of blog post. 🤣
Just kidding! Even though cars are annoying money pits, they are kind of necessary for many Americans and their modern lifestyles. But that also doesn’t mean that cars should cost you an arm and a leg and prohibit you from building wealth in life… There are ways you can keep costs minimal while remaining a car owner. This is a needle you can thread.
How much can you realistically save?
Back in 2020, my wife and I did a complete revamp of our budget, which included making a conscious effort to reduce our auto expenses.
We had two cars back then, but both of us worked from home and didn’t really drive that much (Covid days). We did some math and realized that even though our cars were fully paid off, there were so many hidden costs that came with ownership, even if we weren’t driving!
So we decided to sell one of our cars, and invest that money instead. With the remaining car, we rethought many of our driving habits and got smarter about alternative transportation. Biking more, consolidating trips, finding less expensive maintenance… Many of these tips we’ll talk about in this article.
All in all, I estimate we’ve saved approximately $15,000 over the past 4 years. And that’s not including the growth and interest we’ve gained from investing all those saved dollars!
While I can’t promise that you will save this much, I can say that re-evaluating your lifestyle choices and transportation needs will definitely make a meaningful difference in your bottom line. Tiny amounts of savings really do add up over the years!
OK, onto the tips to save money on car expenses 👇👇👇
1. Drive less
The first step in reducing auto-expenses is to rethink how, when and why you are driving your car in the first place. Sure, you might need to drive to get yourself to and from work… But what about all those other little trips in life?
According to stats from the department of transportation, about 60% of all vehicle trips are 6 miles or less. And I’m willing to bet many of these trips are actually under 2 miles.
What are some of the common short trips that you take? Is there any way to challenge yourself and think of a way to get there without driving your car?
Here are a few examples of ways you might be able to drive less:
- Walk the kids to school
- Jog to the grocery store
- Bike to your next social outing
- Utilize E-scooters and bike share programs
- Carpool to work
Driving less doesn’t just reduce the amount of gas you use. It limits wear and tear on your car too. And if you’re able to get your average annual mileage under 7,500, your insurance company will typically offer a sweet discount on your coverage. It’s a good goal to shoot for!
Owning a car gives you a lot of flexibility and freedom to go whenever and wherever you want. But, don’t fall into the trap of always driving as your default mode of transportation. There are so many other ways to get around, especially for short distance trips!
2. Sell your second car
When my wife and I first met, she had a car and I had a car. Even though most of our activities were done together, there were times when having two cars was handy if we were going in separate directions.
But, the longer we lived with each other, the more we realized that one of our cars was usually sitting idle on the street. And when we totalled up the actual expenses (not even including gas) we were shocked to find out that the second car was costing us around $159 per month!
That is a lot of money to pay for *just the convenience* of having a second car. My wife and I determined that on those odd occasions where we were going to separate places, one of us could use a rideshare service like Uber or Lyft, and it would still be significantly cheaper than owning a second car.
And we were right. After selling our second car, we’ve never looked back. Our lifestyle just adapted and we’ve made one car work for our family.
Not everyone is in a similar situation. But if you have multiple cars, it’s worth at least considering downsizing your household automotive footprint. If you have four cars can you go down to three? If you have three cars can you go down to two?
Getting rid of that extra set of wheels (even if you own it outright) will probably save you more money on car expenses than you think. And I bet your lifestyle will simply adapt – just like ours did.
BTW… There is a little downside in trying this approach. If you sell a car and realize it’s limiting your life, just buy another one and go back to normal. No harm in trying. 🤷
3. Consolidate grocery trips
Whenever I’m at Trader Joe’s, I text my neighbors… “Need anything from Trader’s while I’m here?” . Usually there’s something minor on their grocery list they’ve forgotten and I can pick it up for them.
And do you know the best bit about offering this help to my neighbors?… They reciprocate!! When they are at Costco or Trader Joe’s, they ask if I need anything. This gives me the chance to go shopping without even leaving my house!
Think about how many times people “zip out to the store” to pick up two or three quickly needed items. By thinking outside the box and being a bit more mindful with grocery planning, most convenience trips can be completely avoided!
Try this: For the next month, track how many times you go to the grocery store. Pay special note to the times when you’re just driving to pick up a couple of items.
If you’re just out to for bananas or milk, could you walk instead? It’s not that hard to carry a small bag or backpack. Is there a way you can consolidate your trips or buy in bulk more to minimize your weekly outings to the store?
I know this is getting repetitive, but the less times you get behind the wheel of your car, the more you’ll save money on car expenses. And given how large of a line item transportation is in the average budget, it’s worth thinking through the ramifications of shaking things up.
4. Don’t speed
Obviously if you’re disobeying the road laws, it’s only a matter of time until you get caught and ticketed. And that’s very expensive these days! Not just the ticket cost alone (~$300+ average) but infractions on your driving record can lead to higher insurance premiums for years to come. Ouch!
Even if you’re not speeding, accelerating quicker than necessary or using excessive braking will wear down your car faster. Riding the clutch, revving the engine for no reason, sitting idle with the air-conditioning on for 45 minutes while waiting for your friend to get off work… All these activities age your vehicle at a faster rate, and cost you more money.
Try this: As you’re driving around this week, pay attention to your driving style. Are you treating your car nicely? Or are you acting like Dom from The Fast and Furious?
5. Switch to cheaper car insurance
We’ve written extensively about shopping for cheaper car insurance. Those that do it regularly can save a ton of money, for very little work! We recommend calling around to different insurance carriers – at least once a year. It never hurts to see if there’s a better rate available.
As each year passes, your driving record gets better, your car gets older, and your driving routine changes a bit… Do you think your current insurance company will automatically reward you with a loyalty discount? Nope! They do the opposite. They raise your premium each year.
Getting a new quote takes less than 15 minutes, and could save you a ton. We like and use PolicyGenius for quotes. They shop multiple carriers, find bundle deals, and provide you with the cheapest options.
You don’t have to call each of the major insurance companies yourself and attempt to shrewdly negotiate your premium amount and coverage terms. It would be far better to talk to an independent insurance agent who can shop with multiple companies at the same time. You can find someone local who can help at TrustedChoice.com.
6. Increase your credit score
Adding to the point above, did you know that people with Poor credit scores (sub 580) on average fork out double the amount to insure their car as people with Excellent credit (800+)!?!?!?
It’s true. Here’s some data from The Zebra report findings in Jan 2023:
Most people don’t know this… But all major auto insurance companies (including Geico, Progressive, & StateFarm) do a credit check during their quoting process. Their experience shows that people with low credit scores file claims more frequently and also incur more costly claims. Therefore, they charge extra to insure that segment of the population.
While credit checking for insurance purposes is banned in 4 states (CA, HI, MA, & MI), this means it is standard practice in the remaining 46 states!
Long story short, do whatever you can to increase your credit score over time. And make sure you shop around for insurance as it goes up so you can get the best rates.
7. Pay off or refinance your car loan
Financing a depreciating asset can quickly put you underwater. The longer your car loan, the more likely you are to become “stuck”. This is when you owe more money than what your car actually is worth.
So if you have an auto-loan, one of the best ways to save money on car expenses is to pay off that loan ASAP. The goal is to own your car outright. That way all your spare cash can be saved and invested, instead of going towards interest payments.
If you have an extremely high interest rate, it might be worth looking into refinancing. This will help lower your monthly costs, so you can apply any excess money directly to your loan principal. Check out our full guide on getting out of debt for strategies to attack your loan faster.
8. Downsize your vehicle
This one’s especially applicable if you’ve financed a big, expensive car and have massive monthly payments. You might not be able to reverse your past decisions, but you might be able to minimize the pain going forward by cutting your monthly expenses.
Selling your expensive car and buying a reliable, cheaper, used vehicle will lower your monthly run rate. Even if it costs you money upfront to make the switch, it might be a better decision and smarter financially in the long run.
If you own your car outright and it’s bigger than you need, you might consider switching to an economy vehicle that uses less gas and has cheaper maintenance. Jeeps, Chevy SUVs, or even luxury cars like BMWs and Audis cost a lot more to maintain than smaller economy cars.
So don’t forget to consider the average cost of maintenance. If you’re looking to buy a car that will cost you less upfront and that will leave you with more minimal repair bills, Consumer Reports dats finds that Toyota, Mazda, and Honda are excellent choices.
Check out this chart from Consumer Reports, ranking car brands on their reliability and overall cost of ownership:
Lower cost + more reliability = double win!!!
Don’t underestimate how much owning a reliable and inexpensive vehicle can save you over 10, 20, or 30+ years. It can make a difference of hundreds of thousands of dollars over your lifetime.
9. Get the cheapest fuel
This isn’t a mind blowing new tip, because I hope you’re already smart enough to constantly look at those gas station numbers and remember where the cheapest fuel is in your area. If you drive a lot, buying cheaper fuel will absolutely help you save money on car expenses.
It should be no surprise to the regular reader, but our favorite gas stations are at Costco. Not only do they sell their gas at near-cost price, they are a top tier gas retailer. This means the quality of fuel is better for your car, making it run more efficiently and having less impact on your motor.
Based on a recent AAA study, it’s actually worth paying more for top tier gas in your car. But at Costco you typically don’t have to! It’s cheaper and better. So for everyone that drives a lot and lives near-ish a Costco, definitely get your gas there. Or at least look up other sellers of Top Tier gas in your area.
Related: Here are the other best Costco membership benefits you should know about!
10. Proper (and cheaper) preventative maintenance
It’s important to take care of any car issues before the check engine lights come on or you find yourself broken down on the side of the road. This means regular oil changes, tire rotations, and multi-point inspections on your vehicle.
Personally, I buy bulk oil changes at my Toyota dealership. They offer 3 x oil changes (including full inspections) for $119. I suspect the reason most dealerships offer discount oil changes is because it gives them a chance to identify other potential fixes for your car, so they can make money on bigger service repairs.
But, instead of just blindly agreeing to any proposed repairs the Toyota mechanics find, I ALWAYS look around and see if I can find a better deal.
A few months ago during a routine oil inspection, the Toyota dealer advised that my front brakes needed to be replaced soon. They quoted me a full brake rotor and pad replacement for $800. I told them I would “think about it”, and while I was sitting in the lobby waiting to get my car back, I called 2-3 other auto-mechanics around my neighborhood. Lo and behold, Pep Boys gave me a quote for $360, and I got it all sorted out the very next day.
All in all, finding cheap oil changes and low cost inspections is worth it. And whenever a mechanic recommends a preventative fix, call around and get quotes from other mechanics you trust!
11. DIY washes & cleaning
Why pay a stranger to wash your car, when you can make your kids do it, for FREE!?!? 🤣
But seriously, washing and cleaning your car at home is a simple way to save money and reduce your overall car expenses. You only need a bucket, some rags or towels, cheap soap, and a vacuum cleaner.
When I was growing up, some of my fondest memories were washing the car with my Dad. I would sit in the front seat while he sprayed the hose on the outside, and I’d pretend to be trapped in a rainstorm. Then we’d get all soapy and wet washing the outside. It really was fun, like a movie montage. When we were finished, I’d call Mum over and she’d loudly compliment our amazing job and boast about how she would be the flashiest driver in town with such a shiny clean car.
OK, I’ll be honest – the fun wore off as I grew older. But, I still wash my own car today, and it’s such a cool frugal hack. I pay $0 in cleaning fees each year. But my car still looks fly.
By contrast, a good friend of mine goes to the car wash 2 times a month. At $35 a wash, he pays ~$840 per year to keep his car clean.
I’m not sure about you, but I’d prefer to save money on my car expenses and invest that $840 each year. Investing $840 into a retirement account (like a Roth IRA) each year, would grow to about $138,000 over the course of 30 years. I’d way rather have more money in retirement than have people wash my car for me!
12. Budget & used car sinking funds
One of the main reasons people get caught off guard with car expenses is because they don’t budget for them properly. This means when a sudden large repair is needed or it comes time to buy a new car, far too many folks need to go into debt to afford it.
We’ve written a full post on how to buy a used, reliable vehicle, including ways to save up the cash to buy one. Buying cars outright, in cash, not only saves you money on interest, it actually help you negotiate a better deal on the purchase price.
As for emergencies and unplanned expenses, using a sinking fund is a great idea. Sinking funds are just line items in your budget that you contribute to each month, helping you build up a war chest.
Personally, I set aside $83 each month for car maintenance and repairs (it works out to $1,000 each year). This way, when unexpected repairs pop up (like my brake replacement story earlier), I can afford to pay that bill without dipping into my other savings accounts.
The Bottom Line:
By analyzing your current driving habits and thinking outside the box, you usually find easy ways to save money on your car expenses each year. Whether it means a big change like selling your spare car, or a small change like biking to work once a week, the financial savings are all worth it.
The less money you spend on car ownership, the more you get to spend in other valuable areas of your life! Retirement savings, family travel, or trying fun new hobbies… There are countless better places to spend your money vs. throwing it down the automotive money pit. You just gotta challenge yourself, and make a conscious change! 💪
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