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Home > Consumer Focus Archive > Car Ownership
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Car Ownership |
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Car Ownership:
Ways to Save Cash, and Keep Your Car on the Road
 Next to buying a home, the average American spends the most on car ownership and operating expenses. Comparing vehicles for lowest fuel, maintenance, and repair costs will pay dividends later in ownership and maintenance costs. These tips will put you “in the driver’s seat” before you take your place behind the wheel.
Posted: July 6, 2007
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Calculate and Compare Before You Buy
 There are many cost calculators designed to help you decide how much car you can afford. “AWARE”, or Americans Well-informed on Automobile Retail Economics, sponsors an “Auto Finance Calculator” on its website to help consumers make informed car buying decisions. Kelley Blue Book provides tools for comparing car pricing information, and IntelliChoice ranks cars by lowest repair, maintenance and fuel costs.
Consider using the 2/10/60 rule. It assumes a car ownership period of at least five years. Select the top five cars that fit your needs. For each car, double its retail cost, multiply by 10%, and divide that figure by 60. The result should give you the monthly cost to own over a sixty month, or five-year period. Check out the monthly listings of the lowest “True Cost to Own” (TCO) comparisons.
Research the estimated miles per gallon (MPG) figures for the cars that interest you at www.fueleconomy.gov. This year EPA is running new road tests that measure gas mileage under a wide variety weather and traffic conditions. The revised numbers should appear on window stickers for 2008 cars. In the meantime, you can use a calculator devised by Kiplinger’s Personal Finance Magazine. With this Kiplinger tool, you can tap into editors’ estimates of the MPG for hundreds of 2007 models using the new EPA standards.
Don’t Overestimate What You Can Really Afford
Now that you have a broad range for car cost and operating estimates, what can you really afford? How do you protect yourself from taking on too much debt? Experts agree there’s a big difference between qualifying for a loan, and actually repaying it. Calculating your debt-to-income ratio tells you how much debt you’re already carrying. You can compare your numbers to recommended levels to see whether taking on new debt is a wise move. To “qualify” you for a loan, a lender or a bank reviews your credit report to get an idea of your past credit history. The better your credit record, the lower the interest rate for which you’ll qualify, so be sure to get a credit report from at least one of the major credit bureaus. Check to make sure it’s accurate, and up-to-date. Remember, you are entitled to one free report yearly from each bureau. Call (877) 322-8228, or go to www.annualcreditreport.com to order yours.
Note: Car dealerships often promote a variety of options like extended warranties and a protective undercoat for the car’s chassis. Avoid being pressured into last-minute, on-the-spot decisions by asking ahead of time about options available. Unless you plan to keep a car at least five years, you probably won’t need an extended warranty.
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 Asking Questions May Add Up to Savings on Car Insurance
Car insurance is mandatory in every state, but requirements and insurance minimums vary. Check carefully to see what your state requires before you begin to compare premiums.
Auto insurance coverage can include up to six individually priced categories:
1. Bodily Injury Liability (BI)
2. Medical Payments or Personal Injury Protection (PIP)
3. Property Damage Liability
4. Collision
5. Comprehensive
6. Uninsured or Underinsured Motorist Coverage
“Nine Ways to Lower Your Auto Insurance Costs” has more on what you can do to save money on auto insurance. The more discounts you’re eligible for, the lower your premium.
Insurers may qualify you for lower car insurance rates or discounts if you:
- have an unblemished driving record
- are age 50 and over
- have taken a safe-driving course
- buy a car with an anti-lock brake system(ABS)
- have anti-theft devices on your car
- have added safety features such as airbags, roll bars, or seatbelts
- use public transportation or don’t drive much
- chose a “low profile” car—it’s not costly to repair, and isn’t a target for thieves
- are insuring a teenager’s car, and he or she maintains a high grade point average
- insure more than one car or your home and car with the same agent.
Never Drive Without Car Insurance
There are too many risks to drive without the protection car insurance provides you and others. If you’ve been turned down for insurance, contact the office of the insurance regulator in your state and ask if your state has an uninsured motorist fund.
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 Protecting Your Investment and Keeping Costs Down
Get to Know the Car Manual
Don’t leave it in the glove compartment! Read it as soon as you take the car off the lot. Manufacturers include maintenance milestones and driving tips that will improve the car’s performance, fuel efficiency, and wear and tear on engine parts, brakes, and tires.
- preventive maintenance is key
- coordinate and schedule maintenance on a “car calendar”
- mark the car’s inspection month, (don’t wait until the last day of the month, or the lines will be long), and note the property tax due month
Designate one weekend a month to perform a monthly maintenance check, make a checklist, and note anything unusual. If you do need to take the car to a mechanic, you’ll have a written record.
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 What Can Go Wrong?
Paying attention to how your car is running can alert you to potential problems. Is there buildup on your battery terminals? Does the car leave oil spots on the driveway? Does it squeal when you drive it, or when you apply the brakes? Preventative care can save you dollars, and by performing routine monthly checks, you’ll keep small things from morphing into bigger problems.
Check Fluids:
Check the gas, oil, brake fluid, coolant, windshield washer fluid, power steering and automatic transmission fluids, and hydraulic clutch fluid (if applicable). All of these are important, but if you’re driving with low oil, your entire engine is at risk.
Check Hoses:
Inspect the radiator hoses for cracks, tears, or frayed ends. Coolant leaks lead to the engine overheating and costly fixes. Some mechanics recommend replacing the upper and lower radiator hoses if you replace the radiator or water pump.
Check Belts:
If you hear shrieking sounds when you press the gas pedal, you probably have a loose belt. Replace it right away, because it’s less expensive to do that than to wait until it breaks. Replacement will cost much more that just the price of a new belt. Adjust the belt’s tension following the guidelines in your manual.
Check the Engine for Leaks:
With the exception of windshield wiper fluid and gasoline, the car’s fluids should not go anywhere, or disappear. If you notice levels are low on anything but those two—chances are good there’s a leak. You may also notice driveway stains. Go right away to the nearest mechanic, and have the problem checked out by a professional. Also pay attention to the interior fluid monitor system.
Other Monthly Checks:
- Check the battery posts for corrosion build-up that won’t allow a secure attachment if your car needs a jump.
- Don’t forget to monitor the interior battery gauge to check on battery “energy.”
- Make sure the dash, interior, head and tail-lights, brake, back-up lights and the turn signals are in good working order.
- Adjust the tire pressure by adding air, if necessary.
- Replace windshield wipers if they show signs of wear or are not cleaning the windshield.
- Pay attention to any sounds that seem abnormal for your car and follow up if necessary before the problem worsens.
If you perform these checks every four weeks, you’ll drive with greater peace of mind, avoid getting stranded on a lonely roadway at night, and keep ahead of expensive repairs. The booklet, “Taking the Scare out of Auto Repair” will also help you head off trouble.
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