When putting together your family’s monthly budget, you may be surprised at how many expenses are tied to your vehicle. Even if your car is paid off, that still leaves fuel, insurance and maintenance costs each month. To make sure you and your family properly budget for your vehicle, review these common expenses and strategies you can use to reduce each one.
Car payment – If you took out a loan to pay for your vehicle or are leasing, this is probably your highest monthly vehicle expense. A good strategy for repayment is to set up automatic payments through your lender or your bank to ensure that you’re never late. A delinquent bill can result in costly fees, and can even impact your credit score.
How to reduce your car payment – Most lease and car loan contracts cannot be negotiated, but you may have an auto refinance option. Compare rates from several lenders to make sure you find the best interest rate and payment plan.
Auto insurance – Insurance is an unavoidable vehicle expense, but necessary to prevent more costly out-of-pocket vehicle repairs. Coverage options vary depending on your insurance needs, but liability coverage is required by every state in the United States.
How to reduce your car payment – Insuring your vehicle isn’t an optional expense, but in some cases there are ways to reduce the cost. Ask your insurance agent whether you qualify for any insurance discounts. You may also want to review your coverage options and make sure you’re not paying for insurance you don’t need.
Fuel – This expense is determined by how often and how far you drive on a monthly basis. Gas prices can fluctuate slightly, but try to determine how much you spend on fuel, on average, each month.
How to reduce your fuel costs – The easiest way to reduce your fuel expenses is simply to drive less often. Consider taking public transportation or riding a bike whenever possible. If that’s not an option, try to fill up the tank according to reliable dips in gas prices. For example, gas is usually more expensive during the weekend than the week, and dips to its lowest point Wednesday mornings.
Regular maintenance – Maintenance costs are more difficult to project month-to-month, but it can be done. When creating your family’s car budget, try to project when regular services, like oil changes, will need to be done, and budget accordingly.
How to reduce your maintenance costs – You can reduce unexpected maintenance and repair costs by keeping up with your vehicle’s recommended maintenance schedule. Talk to your mechanic and reference your vehicle owner’s manual to ensure that maintenance checks are done on time. This small up-front investment of time and money could potentially prevent an expensive repair later.
By properly budgeting for your various vehicle expenses, you can create a financial plan that works for your family. Accounting for monthly expenses is the first step in taking control of your finances.