Managing Car Expenses

By Kaitlyn Szabo March 26, 2019

For many, cars are expensive necessities –  that’s why it’s important to take time to assess your unique situation and prepare your budget for all the expenses associated with car ownership. That way, the next time your engine light brightens up, it won’t be a financial emergency because you will have money available to handle it.

 

Budgeting for Car Expenses
According to budgeting experts, most people should plan to spend about 20% of their income on transportation or the total cost of ownership, which includes payments, insurance, maintenance, fuel, repairs, parking, and other related expenses.

A simple strategy to plan for car expenses is to determine how much you spend on your car over a year, then break it down to a monthly figure that you save in a separate account.

  • Gather all your financial records for your car from the last year.
  • Take this total and divide it by 12 to an average monthly “bill.”
  • Transfer this money to a separate “car maintenance fund” savings account.

Don’t know your exact figures? Check out LifeHacker’s list of car expense calculators to find the best estimate for your situation.

 

Ways to Save on Car Expenses
Your driving habits and behavior can go a long way toward keeping costs down. Be sure to drive responsibly and take good care of your car to ensure savings. Here’s how:

  • Drive less aggressively. Good habits include: accelerating gently, maintaining a steady speed, and avoid slamming on the brakes.
  • Combine errands into one trip and carpool whenever possible to reduce mileage.
  • Keep your car properly tuned. For example, the U.S. Department of Energy says keeping tires inflated properly can improve gas mileage up 3.3%!
  • Contact your insurance provider to verify you’re receiving all available discounts.
  • Compare insurance rates to confirm your deductible is the best fit for your situation.

See more savings tips in this article from the Balance.

 

Minnesota Resource: The Lift Garage
The Lift Garage is an affordable, non-profit auto repair service that provides low-cost car repair, free pre-purchase car inspections, and honest advice for all Minnesotans that meet the 150% Federal Poverty Guideline. They charge only $15 per hour plus the cost of parts at no mark-up. Due to high demand, there is a waitlist for appointments, and the typical wait is about six months.

Check out the Lift Garage’s website for more information, including contact information to schedule an appointment.

Safe travels!

 

Money Management E-Newsletter: March 2019