Maintaining your assets can be quite expensive but with the right knowledge, you can save money on car expenses.
One challenge often cited by car owners is the cost of repairs. With cars, it’s only a matter of time before your car develops a fault and fixing or replacing it can be very expensive.
Although some vehicle brands are known to be cost-effective, maintaining them still runs into thousands of naira.
Car loan or saving target?
Raising money for your next car purchase can take time and effort. When it comes down to it, you are mostly left with two choices: either taking a car loan or saving towards it.
Most people prefer saving towards a car purchase. Taking a Car Loan might give you instant access to the car, but you may end up paying 20% to 30% extra in interest.
By using your savings to buy the car, you immediately own the car and are completely debt-free even after making the purchase.
Which you should go for, is dependent on your need. If you need a car urgently, then taking a loan is your best bet. However, if the need is not urgent, it is advisable to save towards the purchase.
Saving money on car expenses
Cars are regarded as assets since they have some amount of value on the market if you need to sell them. However, in financial management, they are often described as liabilities, especially if you acquire one with a loan.
In some cases, they are expensive to purchase and maintain. However, following these tips can help you save money on car expenses.
1. Drive your car longer
Don’t be in a hurry to replace your car. The longer you hold on to it, the more money you will save.
The only exceptions are problematic vehicles that require constant repairs or whose parts are expensive.
Keeping your car for 10 years or more is the best way to get the most out of your money. Opt to keep your car for longer to save money on car expenses.
2. Be modest
As stated, cars are assets, but they could also be liabilities. Whatever money you invest into a vehicle, remember that you can lose a large percentage.
Buying a used or less expensive vehicle is a good way to save money on car expenses.
Maintaining some vehicle brands are known to cost as much as five times more than others.
3. Buy fuel-efficient vehicles
Fuel price is peaking all over the world even as most companies are shifting from remote work to the old norm.
This means more people are commuting and taking trips more frequently.
A smart way to save money on car expenses is to purchase a vehicle that conserves fuel.
4. Buy reliable vehicles
The best way to get your money’s worth off a car purchase is to buy one that will last and will be reliable.
Resale value is largely tied to this as well. Luxury cars tend to have the least resale values while common brands like Toyota and Honda have impressive resale values.
5. Be gentle with your car
If the goal is to save money on car expenses, then you should be wary of how frequently you visit the mechanic.
The trick is to be gentle with how you drive and generally handle your car.
From routine servicing to simple techniques like being soft on the gas pedal while accelerating and braking early instead of slamming onto the brakes, you can determine how frequently you visit the mechanic.
6. Find a long-term mechanic
Finding a long-term mechanic who can help you save money on your car expenses.
Changing mechanics with every new fault is a sure way to drain your finances.
Once you find a mechanic who does the best maintenance for your car, it is always best to stick with them. Long-term mechanics will be aware of all the recent maintenance done on your cars and easily spot issues.
7. Drive less
A way to keep car expenses low is to limit how much you drive.
Other than conserving your fuel, you limit the tendency of your car to develop a fault and thus incur another expense.
However, do note that leaving a car and not driving it at all is also bad for a vehicle.
8. Have an emergency fund
Car expenses do not announce themselves. They mostly just creep up on you. Because car emergencies, by their nature, are unpredictable, it only makes sense to have an emergency fund.
An emergency fund is a separate savings or bank account used to cover or offset the expense of an unforeseen situation like a car expense.
The size of your emergency fund will depend on your lifestyle, monthly costs, income, and dependents.
Tips for buying a car
Whether buying a brand-new or a second-hand car, you are prone to making mistakes.
By following these tips, you can make the best of your car purchase without falling into debt or paying more than you have to.
● Come prepared
As you go to the car dealership to make that purchase, make sure you are fully prepared.
If you are buying a car with a loan, ensure that the loan has been approved and disbursed.
If you are saving towards a car, then have the money ready and be disciplined enough to stick to your budget.
● Keep it simple
Focus on one thing at a time when you go to make your car purchase.
Start with the price of the vehicle you are buying then negotiate a good price. Don’t appear desperate.
● Avoid buying any add-ons
Some vehicles come with extended warranties at an added cost. Others come with extra features.
Avoid these add-ons as they are often very overpriced, and most people have no idea how to figure out a fair price.
● Beware of longer-term car loans
Avoid them altogether if you can. But when you have to, do not go for a car loan with an extended repayment period.
After the first five years, cars begin to incur regular expenses and it would be daunting to pay off a loan and fix your car simultaneously.
● Consider a used car
If a new car doesn’t fit into your budget, you might decide you don’t really need a brand-new car.
Used cars work just as fine as brand-new cars if you are lucky to get one in good shape. However, the trick is to be sure you are buying something reliable.
Whether you have chosen to purchase your next car with a loan or by saving towards it, nairaCompare can help in your decision-making. Visit nairaCompare and start comparing loans and savings accounts today!