A car is a big investment. The upfront cost of purchasing is usually high, but many consumers don’t take into account the total cost of vehicle ownership. Factors like depreciation, insurance costs, repairs, and regular maintenance add up significantly over time. The estimated total cost of owning a mid-sized sedan for five years is a whopping $40,000. Here are some strategies for protecting your investment and reducing ownership costs for the life of your vehicle.
Consider Pre-Owned Vehicles
Many people prefer to buy new cars, as opposed to preowned options. But in many cases, preowned vehicles are a much better value for a couple reasons. The first is that new cars depreciate much more quickly than used vehicles. New cars may lose up to 50% of their total value in just a few short years. Auto insurance costs also tend to be lower for preowned cars, as they are typically less expensive than buying new. Most insurance companies take into account how much a vehicle is worth as they are calculating overall costs. If you want to reduce your ownership costs, buying preowned is an effective strategy.
Follow a Maintenance Schedule
A common mistake among vehicle owners is not following the manufacturer’s suggested maintenance schedule. Sometimes you just forget to take your car in for routine tune ups. But some car owners purposely try to push back oil changes and regular repairs. They think they are saving money by doing this, but in reality putting off routine maintenance can lower your vehicle’s value significantly over time. Keeping up with a regular schedule can help keep your car running longer and reduce long term depreciation costs.
Shop Around for Parts
If you prefer to maintain your car yourself, or you elicit the help of a handy family member when your vehicle needs repairs, shopping around for can save you a considerable amount of money. Consider visiting local scrapyards to see what they have available, or looking at your options for purchasing auto parts from online retailers at discounted rates. Shopping around for inexpensive auto parts can help reduce your total cost of ownership over the life of your vehicle.
Compare Insurance Plans
When it comes to insurance coverage, not all plans are created equal. Different companies provide different deductible rates, coverage, and total costs. As you’re shopping around for insurance, make sure you pay attention to coverage options as well as total overall cost. Certain plans may be less expensive than others, but they may have high deductible costs and inadequate coverage in the event that your vehicle is involved in a major accident. Taking an in-depth look at what’s covered under your insurance plan as well as total cost can help you make an informed buying decision.
Buying a car is one of the biggest purchases you’ll make. It’s important to take steps to protect your investment for the long haul. If you are currently shopping around for cars, buying pre-owned can help save you significant money from the start. Paying attention to routine maintenance, shopping around for auto parts, and comparing insurance plans can also help to reduce your long term vehicle ownership costs.
About the author: Barry Wilbur is a Massachusetts-based mechanic. During his spare time, he is a freelance automotive writer and enjoys his motorcycle expeditions.