The Average American Spends $798/Month on Their Car. 3 Ways to Pay Less
You love your car. It’s your ride. It fits your needs as well as your style.
But have you thought about how much you actually spend to have it? According to the U.S. Department of Labor’s report on Consumer Expenditures in 2017 (released in September of 2018), the average cost to own a vehicle — including purchase, insurance, gas and other expenditures — is $9,576 annually.
That’s $798 per month, folks.
If you spend nearly $800 on your monthly car expenses, you’d probably like to shave that number down a bit. You’re in luck. Use these three tips to save some of that money for the drive-thru window.
1. Kick Your Overpriced Insurance Premium to the Curb
If you have a car, you probably need insurance, right? Right. But that bill takes a big chunk out of your bank account each month.
For many, car insurance is just one of those things where we cave in and pay. Because, just like the electric bill and phone service, we need it, right?
Yes. There’s no getting around car insurance, unfortunately. But one way you could save money is by shopping around and comparing rates at least once a year. Less than 50% of us do that, according to this survey from The Zebra, though 81% of us report wanting lower rates.
So, just like you compare the prices of flights, shoes and laptops before purchasing, why not compare car insurance?
The Zebra, an online car insurance search engine that offers “insurance in black and white,” compares your options from 204 providers in less than 60 seconds.
Here’s how it works:
1. Head over to The Zebra’s search platform. Enter your car’s year, make and model, and your zip code. Continue on to answer questions about your driving habits, your car and your life.
On the right sidebar, you’ll watch rates increase or decrease based on your answers. For example, if you’ve gotten into an accident — that was your fault — in the past three years, your rates will kick up. It’s interesting to see what effect your answers might have.
2. After answering some questions, it’s time to compare. The Zebra gives you an “Insurability Score,” which is similar to your credit score except it’s for car insurance, and it teaches you how to get better rates. The site also gives you different options for coverage.
Seriously, it only takes 60 seconds and you could save up to 50% on your premiums. If you’re paying that average of $118 per month, that’s $59 back in your pocket. Nice.
2. Pump the Brakes on High Gas Prices
If you’re a savvy saver, you probably already use GasBuddy to help you find the cheapest gas station in town. It’s an easy — and free — way to avoid overpaying.
But once you pull up to the pump, here’s something else you can do: Get a discount card from GasBuddy to automatically save 10 cents per gallon on your first purchase (and 5 cents per gallon after that).
The free discount card is tied directly to your checking account. It works at 95% of gas stations throughout the country, so you don’t have to drive around town just to find “your” station. Plus, you don’t have to wait for a rebate — it’s immediate savings.
Simply and securely sign up through GasBuddy. Connect your bank account, enter your address, and GasBuddy will put a card in the mail.
It’s time to put the pedal to the metal on your monthly car savings. Step on it!
3. Get a Better Loan
When you bought your car, you probably got a loan to do it. No problem.
But you probably didn’t get the best interest rate. That means you’re paying more in interest that you should. That’s a problem. You might be able to save a nice chunk of change by refinancing your auto loan.
Tyler Omoth is a senior writer at The Penny Hoarder who loves soaking up the sun and finding creative ways to help others. Catch him on Twitter at @Tyomoth.