Owning a car needn’t be a luxury reserved only for the well off. Whilst there are some big costs that can’t be avoided, being smart and perceptive can help cut these costs considerably. Here are few money-saving methods that can help you handle your driving finances better.
Few of us are fortunate enough to buy a car outright, unless you’re able to get a killer deal on a low-end used vehicle for a couple hundred (you may end up making up costs in repairs). A loan is usually the only solution. This is where most people can create extra unnecessary costs for themselves, by failing to save up enough for a decent deposit.
Ideally, you want to pay 20% of the car’s value outright and have a loan that only lasts 4 years. This will prevent interest from building up. Some people can get carried away paying loans for up to ten years that collect hundreds of pounds in interest. That’s hundreds of pounds that you could have spared by saving a little first.
Seeking a loan can also put some people with bad credit scores into worse situations. This bad credit can subsequently affect future investments. Fortunately, there are companies that specialise in car loans for those with poor credit ratings, as well as being able to offer helpful information.
Car insurance can sometimes be a bigger a cost than the sales price itself, especially for new drivers. However, there are multiple ways to lower premiums that few drivers take advantage of.
The first is largely down to the car you choose. A vehicle with less miles on the clock will generally be cheaper to ensure. This is because the engine and car parts have suffered less wear and tear and therefore have less a chance of breaking and you making a claim. Similarly, you should be wary of car models that have had regular faults or are more prone to crashes – these will most likely have higher premiums.
The way you drive is the second most important factor. By proving you’re a safe driver, you can help to lower costs. This can be done primarily by keeping a clean driving record (i.e. no points or speeding fines), but you can takes things one step further by taking part in an advanced driving course or opting for a black box.
Declaring various anti-theft devices and features can also lower your insurance costs. These could include in-built car alarm systems or extras like steering wheel locks, as well storing your car in a garage. Some people will forget that their car has various safety and security features and hence fail to tell insurance companies and reap the rewards. Read your car’s manual to make sure that you’ve considered every safety feature.
Clearly, not making a claim might be the simplest way of keeping costs down – although it’s easier said than done. If you are involved in a crash, you may be able to make up costs through personal injury claims or through other schemes. This will protect any no-claims bonus, although you should still notify your insurance company of any incidents regardless of whether you make a claim.
General wear and tear will not be covered by your insurance company. The best way to save money on repairs is to shop around garages. Some mechanics may offer deals for being loyal, but that shouldn’t affect you from asking for quotes.
For DIY repairs, make sure that it does not compromise your insurance. Be wary of second hand parts particularly partially worn tyres. Whilst these will be cheaper, you’re essentially paying for a damaged part. The tyre could get a puncture in a month, resulting in you having to prematurely fork out on another replacement.
You can also save costs during repairs by not getting a hire car. An insurance company may offer this to you, but if not you’ll be paying a lot of money for a temporary car. If you can get by cycling or using public transport in the meantime, do so.
There was a time when people used to show off about how fast they could drive. Nowadays, fuel economy is what really defines a good driver. Being able to use less fuel can save you money, save your car from wear and tear and save the planet.
There are all manner of methods for driving more economically. Basics like tyre checks, accelerating smoothly and not speeding can all keep your fuel consumption low. Other methods such as reducing air con use, closing windows and removing extra weight (such as roofboxes and trailers) can also have you stopping for petrol less.
Obviously, the fuel you use will also affect the cost. This can vary depending on where you live in the world, with some countries favouring diesel over petrol. You may also be able to find pumps with cheaper types of fuels such as biodiesels – however not all engines are set up for these, so you should always check first to avoid unnecessary repairs.
The final biggest cost of driving is road tax. Based on the amount of emissions your car produces, you can save money on road tax by buying a clean car. Newer cars usually produce less emissions and are therefore cheaper. Some vehicles may even be entirely exempt from tax such as electric vehicles and agricultural vehicles.
There are few ways to cheaply reduce the tax of your vehicle. An emissions test may be able to point out some worthwhile alterations, but generally you won’t make much a difference unless you change the whole engine. If you are suddenly registered as disabled you may be able to own a vehicle tax free. Various business uses may also reduce tax costs, as well allowing you to claim on expenses. If you own a goods vehicle you can also lower your tax by altering the weight. This site offers more in depth information.