1. Raise your Insurance Deductible – call your car insurance company and ask to raise the deductible on your auto insurance policy. Your deductible is the amount of money that you will have to spend out of pocket before your insurance company’s coverage begins. Raising your deductible will save you money on your monthly premiums – in some instances as much as a 15-40% reduction in your monthly bill. And DON’T pay in installments! Pay for a full 6 or 12 months at a time.
2. Compare Insurers – I know this sounds like a no-brainer but I am consistently surprised at the number of friends and family that I talk to that have had the same insurance company for the last decade and haven’t shopped around to see if there are more competitive options out there. We’ve all seen the GEICO, AllState and Progressive commercials and these are obvious indicators that these companies are actively competing for your business. That said – shop around (and be sure to look to combing policies: housing, auto, life, etc.)
3. Buy Used – there is a reason why any and all personal finance professionals, books, and websites recommend buying used. It is because buying a used car is hands down a financially savvy move. A car loses 15-20% of its value each year: meaning you suffer the most significant depreciation in the first few years of owning a new car. You can be a prodigious cutter of coupons, a prolific preparer of frugal meals and a fanatical deal finder – but financially speaking you are far better off being a prudent purchaser of reliable used vehicles.
4. Pay Your Loan off Sooner – many of us get caught up in what I’ve referred to as “minimum monthly payment syndrome”. Sadly, this condition affects 9 out of 10 people in this country. And even that used car that you got a great deal on won’t turn out to be so great if you spend the next 72 months paying it off at an interest rate of 8%. If you can’t pay it off in 12-24 months, you spent too much!
5. Look for Maintenance Deals – whether it’s a tire rotation, an oil change, transmission service or a break job, there is NEVER a reason to pay full price. Whether you take your car to Valvoline, Jiffy Lube, or your local repair station, chances are they offer coupons either online or in local publications. And using that “$10 off your next oil change” and “Free tire rotation with your next brake job” coupons add up over the lifetime of your car. Another under-utilized resource that I have regularly used: local community colleges. Many communities have one or more technical college and these technical colleges often have programs in Automotive Repair. Frequently they are looking for opportunities to provide students with relevant experience and will offer maintenance services for the cost of parts/fluids (no labor!).
6. Car Pool/Take the Bus/Ride your Bike – chances are that you live relatively close to a co-worker or a public transportation line. And if that’s not the case, don’t tell me you couldn’t stand to get a little more exercise. I know these aren’t as convenient as driving your own car – but if you weren’t looking to make some changes in your personal finance you probably wouldn’t made it to #6 on this list. A willingness to endure a little short term inconvenience and some long term planning go along way in establishing financial stability.
7. Refinance your Auto Loan – if you currently have an auto loan where you are paying higher than 5%, refinance it. As an example, a friend of mine recently purchased a used Honda CRV and her financing through the dealership was 7.2% APR (ouch!) but decided shortly thereafter to transfer the balance to her credit card after receiving a “0% interest for 12 months” offer. Granted, she paid a balance transfer fee of 3%, but over the course of the next 12 months she will have saved money (not to mention she has reworked her budget to have the car paid off within the next 12 months!).
8. Learn to do Basic Auto Maintenance/Repairs – No, I’m not talking about rebuilding engines, brake pad/caliper changes, or any number of things that may best be left to a professional mechanic. But I am certain most of you have the know-how and ability to change a windshield wiper, an air filter, and a host of other minor auto maintenance/repair needs. When you pull into your local oil change spot, chances are they are charging you quite a premium to perform some of these additional recommended services.
9. Spend Less at the Pump – you would be surprised at the effect your driving habits can have on the amount of money you are currently spending on fueling your automobile. Do you get in the car and make multiple, unexpected trips during the week – across town for a gallon of milk, to the mall to return those shoes that didn’t fit just right, through downtown traffic for that cup of $4 coffee that you love so much? My profound advice – consolidate your trips and plan ahead. Find time to make a list of where you need to run to for the week and what errands can be grouped together. Doing so will save you money and headaches!
10. Drive Safely – as a recovering road-rager, I know first hand how frustrating that congested morning commute can be, how irritating that car in front of you that refuses to use a blinker is, or how maddening that elderly gentleman driving 10mph below the speed limit in the left lane might seem. But learn to take a deep breath and put these things in perspective – especially on the road. Speeding tickets, accidents and high blood pressure are all costly from a financial standpoint. Life is filled with annoying things and inconveniences – chances are you’ve probably been the cause of some of these – but as adults we’ve been tasked with learning how to respond to life’s little “that’s not fairs” in a healthy, positive way. Your time in the car will be much more enjoyable if you can avoid working yourself into a self importance induced frenzy!