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As anyone who owns a car can attest, the cost of car ownership can be quite high. The cost does not have to be overwhelming, however. There are several steps you can take prior to and after purchasing a car to manage your car-related expenses.
Before you buy that car, ask yourself these questions:
1. Do I HAVE to own a car? For those of us living in some suburban or rural areas, the answer is “of course”. For others of you who live near reliable public transportation or in cities where parking and insurance are expensive, the answer may be “no”. Consider the costs of using public transportation to and from work and renting a car only when you need one. If those expected costs are less than car payments, insurance, gas, maintenance, and repairs you may not need a car at all.
2. Is there a used car out there that will serve my needs as well as a new one? Consumer Reports regularly tests and rates used cars of all model years and makes. Because a new car will lose great value as soon as you sign the purchase agreement you can likely save money by purchasing the same car as used. Also, you may be able to upgrade to a higher quality used car while at the same time spending less money than if you purchased the new car you were considering.
Once you have decided to purchase a car, there are ways you can save money on the purchase price:
1. Know the value of the car you want. Consumer Reports offers an evaluation service, for a small fee. You will receive a report listing the blue book value of your chosen used car or the dealer’s cost for the new car you have your eye on. You will receive other information and advice as well. If you know how much the car is worth, you are in a better position to get the best possible price.
2. When searching for your car, get on-line quotes as well as dealer quotes.
3. Price car loans. Often, your bank or credit union will finance the car for less than the dealership financing. Also, if you can afford the payments, go for a shorter loan. You will get a better interest rate and will pay less in total interest.
4. Shop for car insurance. Consider insurance from two angles – the individual car you are insuring and the insurance company. Rates across different insurance companies vary widely, as do rates across different cars.
After you have purchased your car, there are also things you can do to minimize costs:
1. Follow the recommended maintenance schedule. In the long run, maintenance will likely cost less than repairs resulting from improper maintenance. Also, warranties may be voided if you have not taken care of the car properly.
2. Leave the car at home. Walk or ride a bicycle when possible. You will be in better shape, save wear on your car, and save gas.
3. Practice good driving habits. You will get better gas mileage if you avoid quick starts and excessive braking. Driving the speed limit (rather than going faster) also saves gas. Also, you will reduce the potential costs of a car accident or a traffic violation.
With care, car ownership can be rewarding. By following these tips you can enjoy the experience.
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