I want to share a few thoughts/mindsets on personal use auto costs. Unless there is a fundamental change in our society, which is unlikely, the cost of purchasing, fueling and maintaining our cars will be with us our entire lives.
With this fact in mind, I want share a few scenarios for your consideration. Making minor adjustments and keeping long-term value in mind, when making automobile decisions can equate to substantial savings.
Just like our homes, maintaining our automobiles is key to increasing their value to us over the long run. Once paid off, keeping your vehicle as long as it is reliable offers the greatest value.
When shopping for a vehicle, strongly consider a vehicle with a monthly payment which is $100 / month lower than you had originally budgeted. Over a five year repayment schedule this saves $6,000. If you live 40 more years and always have a car payment, this strategy will save you $48,000.
Consider mpg (miles per gallon) when shopping for a vehicle. Driving 15,000 miles per year in a vehicle that gets 40 mpg can save you $1,031.25 / year vs a vehicle that gets 20 mpg (based on $2.75 per gallon). Over 40 years, this strategy will save you $41,000.
Required auto insurance premiums can be up to 50% lower annually on a car you own vs one you are making payments on.
A monthly car payment of $300 equals $3600 annually. Keeping your current vehicle which is paid off and spending $1,200 in annual maintenance costs will save you $2,400 / year which equals $200 / month saved.
Over our lifetimes, these are a few simple strategies that can save us over $100,000.