By Lake
BillSavings.com Brief: Cutting transportation costs did not used to be something many people thought about, but record gasoline prices have forced many people to re-examine how much they are spending. You can find some useful tips and strategies here to help the necessity of getting around have less of an impact on your financial picture.
You may not think about this but the reality is that cars are not a necessity, but rather a luxury. If more people thought this way in America, there would be fewer financial problems, and fewer accidents. Using alternative transportation can save you a fortune. However, if you are not interested in being quite that thrifty or wise, here are some tips to keep in mind.
Do your research before buying a car
Contrary to what the television commercials might tell you, cars are not really built to last a long time. The highest profit margin for automobile manufacturers is in replacement parts. That is not to say that there is some conspiracy out there, but the fact is that cars are engineered to last a reasonable amount of time (usually just about the length of a warranty).
You want to research which cars are the most reliable in terms of needing service. There are numerous resources on the web for buying new and used cars. The more research you do, the more money you will save and the less hassles you will have.
You also want to consider other operating costs, such as gas mileage, registration, and insurance.
Safety first
Beyond operating costs, there are much more important issues to consider, such as safety. Remember, you put your life in your car’s hands every time you drive it. About 40,000 people die in traffic accidents each year in the United States, so you should ensure yours protects you as much as possible. Air bags, for instance, just might save your life.
One good resource for researching your particular car’s safety is the website for the National Highway Traffic Safety Administration (www.nhtsa.gov). You will find crash test data and information on other safety issues related to cars.
Financing is expensive
Why go through the work of getting the best deal you can on your new car purchase, then end up paying twice what it is worth because you financed the deal?
A general rule of thumb is never to finance purchases that consume additional money, especially those whose value depreciates. Leasing is generally more expensive than taking out a loan.
If you think it is unreasonable to buy a new car with cash, try to remember your long-term financial best interest. Crunch the numbers and consider how much money per month you are paying in finance charges, then calculate how much those finance charges would earn you in an investment of some type.
Here are some other thoughts to consider:
- Buy what you can afford – If you do not have enough cash to buy a new car, buy a used one. Remember that most of the world’s population cannot afford a new car. If you simply cannot live without that dream car, save the cash, then buy. You will save yourself thousands of dollars in finance charges.
- Do not fool yourself – Your mind may try to tell you that buying a used car means more repairs, maintenance, and problems. Do your homework as described above and you can buy a quality car that will last for years. A used car is also cheaper to own because of lower taxes, registration and insurance costs.
- Check your ego – Stop trying to keep up with the Joneses. There will always be people who have nicer, more expensive cars, get used to it. You might even try to convince yourself that you have to drive a nice car to impress your business clients, but there is another side to that coin. They may just think that you are wasteful or that you are making too much money from them!
Dump the cash drainIf you have found yourself with more car than you can afford, either from operating costs like gasoline and insurance or too high a monthly payment, get rid of it! The sooner you dump that monkey off your back, the more money you will save. Though it is a little tricky to return a leased vehicle (another reason to never lease one), if can be done in some cases with a little heartfelt communication.
Other ways to saveYou will save thousands by following the tips above. Here are a few more ideas to keep your transportation costs to a minimum:
- Do not buy more cars than you need – Do you really need four cars for four people? Try to find ways to use fewer cars, such as carpooling or using public transportation. Public transportation can actually be a fantastic tool to accomplish more in life. The two hours a day spent traveling to and from work, for instance, can be spent studying school material, reading a self-improvement book, or just de-stressing to some relaxing music through your headphones.
- Buy commuter passes – In addition to saving you lots of money, public transportation is also environmentally friendly. To maximize the value, buy bus, train, or subway passes to save even more money. If you are still driving, many toll-ways (bridges and highways) have multiple tokens, tickets, or passes you can purchase at a discount. Some areas even allow you to deduct these from your paycheck as a pre-tax purchase.
- Use regular gas – Numerous studies have shown that premium gasoline is not worth the premium price. Buy your gas when you are shopping at your warehouse or wholesale club, if you belong to one. Gas is often cheaper there.
1/1/2008
