6 Smart Financial Decisions to Make For Your Car
/Heading into the new year is a great time to think about saving money. After the holidays, you’re likely thinking about ways to pad your wallet a little bit. Have you considered how you can save on your car this coming year?
From getting an extended car warranty to finding the cheapest car insurance, there are plenty of smart financial decisions you can make this year regarding your vehicle. Here are 6 financial decisions you can make for your car that will start your year off right.
1. Consider an Extended Warranty
Extended warranties are just that, warranties that extend past the life of your factory warranty. These aren’t for everyone, but an extended car warranty can save you big bucks in the long run. If you drive a luxury or sports car, especially, an extended warranty can really help you save on repairs.
Your car almost certainly came with a factory warranty that covered major breakdowns and repairs on major parts like the engine and transmission. An extended warranty can cover those parts, plus extras. This is especially true if you plan to keep your car longer than the factory warranty expiration.
If you plan to trade every three to five years, drive a car older than 10 years, or have already paid for significant repairs to your car, extended warranty coverage might not be for you. Remember that you’re paying for the eventuality of expensive car repairs.
However, if you’ve got a newer car that’s not under a factory warranty, you can get extended coverage from the engine to the paint job. Many insurance providers throw in roadside assistance and various levels of travel reimbursement as well.
2. Get Cheaper Car Insurance
When was the last time you checked for a new car insurance quote? The beginning of the year is a great time to compare quotes online to find the best car insurance rates. Don’t forget to compare your current provider with two or three other companies’ similar policies to see if you could be saving money on your monthly premiums. Also, check with your company to make sure you don’t miss out on loyalty discounts by switching.
Checking quotes often keeps car insurance companies competitive, so don’t be afraid to check for quotes as often as twice a year or when your coverage is about to expire. Be sure to gather your information and collect as many quotes as possible. As your information changes, you may be eligible for new discounts, so don’t be afraid to ask.
3. Create a Spending Plan
You know car expenses are going to happen. While getting an extended warranty can save you long-term, you might need to save on the front end for expenses you expect later. In other words, whether you try a warranty, you can expect to pay out for car repairs at some point. It’s a good idea to ask a mechanic who is knowledgeable about your make and model what you can expect in the next 3 to 5 years so you can plot your spending and savings goals. Knowing when to refinance your car loan is also a good idea so that budgeting for eventual expenses is an easier process.
Budgeting ahead of time for car expenses will help you save money in the long term. You can designate some of every paycheck or invoice to car repairs so you will have the amount you need when the time comes. Saving for your car repairs is a great way to have good overall financial health in the new year.
4. Set a Savings Goal
It’s always a good idea to set savings goals at the beginning of the year. This is especially true for planning your car expenses. You can save by paying for an extended warranty, which is essentially paying for your car’s future repairs in advance. You can also save money on car repairs by looking for more affordable car insurance.
You can also put money into a savings account and prepare for car expenses in the future. Saving ahead of time for inevitable car expenses will help avoid going broke in the long run. A car repair fund ensures that you will be prepared for unexpected expenses.
5. Perform Regular Maintenance
Counterintuitive though it may be, performing regular maintenance on your car will save you money for the future. Not only will regular or scheduled maintenance keep vital systems running longer than average, but you will also likely be apprised of larger repairs before they become a problem. Taking a proactive approach to maintaining a high-performance vehicle ensures that it remains in optimal condition; for instance, if you're ready to sell your Ferrari F8, keeping a record of regular maintenance can significantly enhance its appeal to potential buyers and potentially increase its resale value. This way, you can thus save up for these repairs.
6. Do Your Research
Before you settle on an extended warranty, new car insurance company, new mechanic, or new vehicle, do your research. The internet offers customers a direct means of praising excellent customer service and airing any grievances. Pay attention to customer reviews and the company’s local reputation. Anything worth spending money on is worth doing the research to back it.
The Bottom Line
Owning a car doesn’t necessarily have to be expensive. Getting an extended warranty and keeping up with regular maintenance are good strategies to minimize your car repair expenses. It’s also best to do research before you commit to a new insurance provider. This way, you can make sure you’re making a good investment.
