Chapter 8 | Saving on Transportation
How Many Cars Do You Need?
If you and your family own two or more cars, begin by asking yourself, how many do you really need?
With some cooperation and effort, it should be possible to work out a single-car schedule that meets everyone’s needs and saves you money in gas, insurance, and maintenance.
Cars can cost a lot of money: Payments or leases usually run several hundred dollars a month; maintenance and repairs are expensive; over-the-top gasoline prices can squeeze your budget; and registration and insurance can set you back a thousand dollars or more each year.
Looking Into Public Transportation
If you live in an area where you can walk or bike to work and the grocery store, or if you have a reliable mass-transit system in your area, consider getting rid of your car.
Many people wonder how you’ll get home for the holidays or take vacations if you don’t have a car. The simplest solution is to rent a car when you need one.
Carpooling
Carpooling is most effective when you can do it with people who travel regularly to the same place—mostly those with whom you work.
Some employers encourage carpooling by their employees, offering vouchers and other incentives for those who carpool.
Going the Bicycle or Vespa Route
Cycling to work every day gives you two immediate benefits: 1) It saves you money; and 2) it gets you into shape.
Vespas. These economical vehicles are like low-powered motorcycles, and generally run from $2,000 (used) to about $3,500 (gleaming and new). If you can sell your car, buy a Vespa, and saving bundles in gas, insurance, and registration might make getting a little windblown not seem so bad.
Keeping a Paid-Off, Reliable Car
Note that if you have a reliable car that’s paid off, runs well, and costs a reasonable amount in gasoline, maintenance, and insurance, you’re probably better off not selling it. A car like this is just too rare to part with.
Next time you buy a car, purchase the highest-quality model you can afford, put as much money down on it as you can, and arrange for the fewest number of payments possible. Then plan to drive the car—payment free—for as many years as you can after you pay it off.
If you must own a car, don’t lease! Instead, buy a reliable car on the fewest number of payments you can afford and plan to drive it for ten years—or more. After you’ve paid it off, keep making the payments to your savings account so that you can pay cash for your next car.
Stop thinking of a car payment as a fact of life. Just imagine how much more breathing room you’d have each month if you didn’t have a car payment.
Insurance companies change their products and prices all the time. Once a year, do a quick Internet search of insurance prices, and if you find a substantially lower price, ask your current agent to requote your policy to see whether he or she can match what you’ve found.
Drive carefully and safely. If you maintain a good driving record, you may be eligible for a Good Driver Discount at your insurance company. Ask your agent about it.
Raising Your Deductibles
If your insurance payments are still uncomfortably high after you shop around, try raising your deductibles (the amount you pay out of pocket if you have an accident, your car is stolen, or a flood washes your car away).
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