Back when you were learning to drive the costs were as clear as day: the costs of the lessons, the fees for the driving and theory tests – now reduced thanks to free online resources – and maybe a bit of petrol money here and there.
Now you’re running your car, you can look forward to various different costs, known and unknown, so it’s important to save cash where you can.
The costs can be divided into ‘standing’ charges and ‘running’ costs:
- Standing charges – costs you incur even if you don’t turn a wheel
- Running costs – costs incurred by physically using the car
Standing Charges
Finance (where applicable) – if you’re thinking of financing your car purchase through some form of loan, then make sure you shop around for the best deal.
The APR (annual percentage rate) is the rate to compare, but it’s better by far to find out what the TOTAL cost will be over the term including interest payments. This makes it easier to compare what you’d actually pay with different providers.
Insurance – a significant cost, especially if you’re a young driver with little no claims record. The key is to shop around: use car insurance comparison sites to conveniently get quotes from companies for comprehensive car insurance.
Don’t forget to check prices at renewal time. Insurance companies are notorious for charging more at renewal than they might for new business.
Depreciation – the largest overall expense mainly for newer cars. You’re too late if you already own a car of course, but bear it in mind if purchasing.
Breakdown cover – a worthwhile investment to prevent being stranded, but don’t just rely on household names like the AA and RAC. There are others – and some pay and reclaim outfits are worth considering as you’ll save money compared to the ‘big two’. See here for further details.
Running Costs
Fuel – likely to prove the largest running cost so keep your eye on local full prices. Supermarket fuel is considered to be of decent quality, so if it’s the lowest priced, fill up with it. An advantage with supermarkets is the promotions they sometimes run for fuel in conjunction with their loyalty schemes.
When travelling longer distances, try and avoid motorway services as fuel is more expensive than elsewhere.
Servicing and repairs – check out reputable local garages and pricing. If your car is under warranty, you don’t necessarily have to use the franchised dealership so long as your independent garage can provide work and parts to the manufacturer’s standards.
Shop around for MOT tests – although there is an ‘official’ MOT fee, many centers provide their own prices below it. The trick is to find a garage you can trust and stick with it. Word of mouth recommendations can be crucial for this.
Tires and exhausts – shop around. Some local tire and exhaust centers, including franchised dealers, may be prepared to price match even on Internet quotes. If you don’t ask, you won’t get. I like Costco for my tires. They have good quality and good customer service.
Taking the Time
Of course, shopping around and conducting ad hoc research to save money takes time, but it’s worth in the long run. Even small savings on your car running costs can soon mount up over a year or so.
How do you save on car costs?
Well I’ve been driving with a small crack in my windshield for over a year… Haha. We also live close to a native reserve where gas is cheaper, so we sometimes gas up there (although someone once told me this was illegal, but I have never found evidence to support that). I use a broker for my insurance, but I’ve been meaning to talk to him about seeing if there is a more affordable option out there for me, especially while I’m underemployed. I could really use those extra few dollars!