It’s Your Choice: 4 Ways to Save Money by Buying Services a la Carte
A la carte: A menu or list that prices items separately. — Webster’s Dictionary
They say you can have it all.
But what if we don’t want it all?
What if we just want a few awesome things we like, and don’t want to pay for all the other stuff we don’t need?
Why should we pay for hundreds of TV channels we’re not watching, reams of cell phone data we’re not using or car insurance for long-distance road trips we’re not taking?
More and more, savvy consumers are finding ways to buy individual items a la carte instead of paying a lump sum for some kind of big, all-in-one package that doesn’t fit their needs.
In that spirit, here’s the latest information on a la carte services for TV, wireless providers, airline tickets and even auto insurance.
1. Cut the Cord on Your Cable
More and more people are bidding farewell to cable because it’s so expensive. In a recent TiVo survey, nearly half of cable or satellite users were actively planning to get rid of the service in the near future or were at least open to considering it.
About 80% of those who have cut the cord did it because of the price. American households that still have a pay-TV service are paying an average of $103 a month for it.
Most viewers in the U.S. and Canada now want a la carte TV service, only paying for the channels they actually watch, the TiVo survey found. (The top five requested channels: ABC, CBS, NBC, Discovery Channel and History.)
TiVo found that 60% of people surveyed didn’t need cable because they were using online streaming services. Over 54% of those had Netflix, 27% used Amazon Prime, and 12% used Hulu.
Each streaming service has its own pros and cons, and if you’re wondering which would be best for you, we’ve got you covered here. You can compare costs, the type of content, the number of available titles and more.
2. Pay By the Mile for Car Insurance
Susan Gibbons doesn’t drive much. She works from home. Sometimes she’ll swing by the supermarket or the doctor’s office, but that’s about it.
And she only pays $35 a month for car insurance.
“All my driving is around my neighborhood,” says Gibbons, 55, of Philadelphia. “A few miles here, a few miles there.”
Being such an infrequent driver, she got tired of spending so much on auto insurance. It made no sense for someone like her, who easily drives less than five miles a day, to pay the same rate as someone who drives 50 miles a day.
So she found Metromile, a startup trying to revolutionize the auto insurance industry. It offers low-mileage drivers a unique new option: pay-as-you-go insurance coverage.
She’s the kind of customer Metromile is built for — low-mileage drivers like urban dwellers, retirees and those who work from home. Founded in 2011, the insurer is also betting millennials will be tempted by cheaper, customized car insurance.
Metromile is currently available in California, Illinois, New Jersey, Oregon, Pennsylvania, Virginia and Washington. Next, the company plans to expand into Florida, New York and Texas.
Customers typically pay a flat fee of $35 per month, plus 5 cents per mile. Metromile tracks your mileage through a device plugged into your car’s diagnostic port.
Before she switched insurers, Gibbons had been a State Farm customer for 30 years. She figures her car insurance bill has plummeted by $720 a year.
3. Strip-Down Your Cell Phone Service
With a wife and two kids to support, Zak Wilson has to stick to a budget. But when it came to cell phones, he could never find the sweet spot — reliable service he could afford.
Wilson was with Verizon Wireless for years, but was frustrated because it cost so much. He was paying around $180 a month for cell service for himself and his wife.
“With the data plans, it’s expensive,” says Wilson, a 43-year-old salesman who lives near Portland, Oregon. “I felt like I was paying for double internet — home internet and phone internet.”
That’s when he tried Twigby. It’s a discount wireless carrier making a splash in the competitive world of low-cost, no-contract cell phone service.
It’s an MVNO, a Mobile Virtual Network Operator. It buys connection wholesale from the big wireless carriers like Sprint and Verizon, and resells it to customers.
“The cost savings is extreme,” Wilson says. “Now, for both phones, we’re paying maybe 60 bucks.”
4. Believe in the Virtue of Unbundled Airfare
If you buy what’s called a basic economy ticket on American or United Airlines, you’re not allowed to stuff your carry-on into the overhead bins. Those precious bins are off limits!
These days, airlines are increasingly dividing their cabins and charging separately for things that used to be covered by the overall fare, like overhead bin space and Wi-Fi. Some flyers feel like they’re being nickel-and-dimed by this trend. But that’s not how we see it.
We see it as a way to get cheaper plane tickets.
The basic economy fare works much like the fares for low-cost carriers like Allegiant or Spirit. You get a seat, and that’s about it. If you want to bring a carry-on or choose your seat, you’ll pay extra for it.
The benefit? You get to fly in a United or American Airlines cabin instead of in a cramped low-cost carrier’s seat. And you have the option to purchase in-flight food and entertainment that low-cost carriers don’t even offer.
That’s life a la carte, people.
It’s One of the Easiest Ways to Save Money
As consumers, we’re increasingly offered new choices and options when it comes to TV, car insurance, cell phone service or airfare.
When you grab lunch at Chipotle, do you want to pay a dollar extra to add guacamole to your burrito? Or will you skip the guac and save a buck?
It’s up to you, the customer.
It’s the dawn of a new age.
Mike Brassfield ([email protected]) is a senior writer at The Penny Hoarder. He likes having choices.