Saving money on transportation
Hmmm transport. We all need it, and it all costs us money one way or another. Some of the best days of my life were back in 2003. I was attending Sydney University and I lived in a cheap flat 2 minutes off the subway line and 10 minutes from downtown. While the apartment would not be my choice of living standards these days, not having to need a vehicle was a very freeing and cost effective way to live. I would buy a weekly student pass for the Sydney transportation system and walk everywhere. I was super fit and had access to the whole city for a few cents per day. It was only ever a problem for grocery shopping, so I would have to go to the shops a couple of times a week.
As much as I love America, the public transport system is not one of it’s greatest achievements. Unless you live in the north east, chances are you need a vehicle to get around. These days like most of you I am weighed under by the huge expense and responsibility of car ownership. Ha I know it’s funny, writing a road trip blog and secretly hating my vehicle but it’s true, I long for the days to be free of this burden again.
One of the biggest mistakes I ever made was buying a fancy European car. Just driving into the dealership, I know right away I’m going to be out of pocket at least $800 for any minor problem and I have to have savings in reserve specifically for this. Boy I wish I had known this rule a couple years ago but my number one advice to anyone is buy American made, or at least a good quality car that’s very popular with cheap parts and super cheap to fix. Here are 8 examples to look at. You will thank me when you only have to pay $200 instead instead of $1200 in parts and labor. Here are some more tips when faced with a broken down vehicle.
– Ask friends and colleagues who have a similar car, who they go to and who they trust to fix their car for a fair and reasonable price. Word of mouth is so important and mechanics take pride in their referral rates. If you’re not happy, chances are they will cop flack from your friend as well.
– stay away from the dealership unless u are under warranty or there is a specific problem needed to be fixed by them specifically.
– Go and get a second or third opinion if something doesn’t seem right.
– Just like my hair salon tip, go to a not so trendy area. You might find a gem of a mechanic out in the burbs, as he doesn’t want to pay high rent costs in the city.
– If you need to replace a specific part, ask your mechanic how much it would be to buy the part yourself (new or second hand), and then just pay for the labor to install it.
Another necessary evil. I pay my insurance fees twice yearly and it’s by far the most dreaded bill. I absolute dread it because it’s so expensive and It feels like it’s just money down the drain. Of course it’s handy when we need it, but when we don’t it feels like a total waste. There are a few ways to ensure that we only pay the bare minimum, and cover our butts enough to show Mr policeman we are good responsible members of society.
– Consider only paying for liability. The general rule of thumb is: if you car is worth $4000 or under, then it’s perfectly acceptable (and significantly cheaper) to only do 3rd party coverage. This will virtually cut your bill in half, but remember, if you have an accident and it’s your fault, your vehicle is not covered. Who knows though, this might encourage you to be a better driver 😉
– If you do have a newer vehicle and opt for fully comprehensive coverage, consider raising your deductible. Sure it’s nice to only be out a few dollars in the event of an accident, but again, the odds of you specifically causing an accident are very low if you are diligent and responsible. think about increasing your deductible to $500 or $750 to save on your yearly insurance costs.
– If you are a good driver, call up your insurance agency and remind them that you have been accident free for over 3 years, you are the only driver, you don’t drive much and whatever other reduction you can get. It’s important to keep on top of this and have an individual policy tailored just for you.
– Shop around. This can be a real pain as most companies want to know the ins and outs of a ducks ass just to give you a quote. They will ask for your name, address, email, phone, vehicle age and brand at the least. If you want to get quotes anonymously set up a new email, give your neighbors address, don’t use your real name but give the right vehicle information. Haha. Also, if you find a better deal but like your insurance broker, call your agent and tell them about the quotes you have and ask if they will match it in order to keep your business.
Lease Vs Loan Vs Own –
I remember when I first came to this country. I was so excited to be part of American consumerist culture I raced out and got a lease on a brand new Subaru WRX. It was an awesome car and I thoroughly enjoyed it, only problem was the lease cost $360 a month plus a sizable signing payment. I diligently kept up the payments and after three years I had to hand it back and had absolutely nothing to show for it. All that money spend for nothing. I had the option to purchase the car for $15,000, but i was so upset with the whole process i walked away. It was a fun time, but I would never do it again, and I would never recommend others doing it, unless of course your employer is making the payments.
If you do decide to lease a vehicle, here are some other things to bear in mind.
- There is a mileage limit. If you drive a lot this is not a viable option
- Any minor scratches or wear-and tear-charges can be added at the end of the lease period.
- If for any reason you can no longer continue with the lease, it can be very expensive to get out of.
Loans are typically more expensive than leases and it just adds another humongous bill to your life. Its not uncommon to pay over $500 a month for a commodity that is depreciating by the day. You can use the same saving money tactics as you would with a mortgage. Pay it off as quick as you can, refinance, make extra payments etc. I don’t recommend loans but I understand it’s some people’s only option. At least it’s ‘yours’ at the end of the day and you are free to sell it whenever you want. Just be smart and sensible about it.
This is by far the best, smartest and cheapest option out there. A Mechanical Engineer friend of mine recommends buying the newest car you can afford as this cuts down the likelihood of potential mechanical problems. Buy a good quality second-hand vehicle for cash and you’re done! These days car dealers are ready and willing to negotiate and you can pick up a really good deal. If at all you are not happy with the quality or treatment you receive from a dealer then just walk away. Plenty more options out there and it’s important to have a good relationship with these people for any problems that may arise.
I paid cash for my car, and despite the mistakes I made with the make and model, I’m super happy I don’t have an extra bill to pay every month!
Remember at the end of you day, you and only you have to be happy with your choices. Don’t buy a car to impress other people, that just attracts superficials you don’t want in your life anyway, and don’t fall for fancy marketing and sales techniques. These people are employed to sell vehicles, and they don’t particularly care who you are as long as they make a sale. You are the one who is responsible for purchasing, insuring and maintaining your car. It’s a harsh world and bad things happen to good people. You could be the nicest guy or girl ever, but miss a couple of payments due to being laid off, sickness, or any other unforeseen event and all of a sudden you are deemed irresponsible, unreliable and undesirable. This reputation will follow you for YEARS and will be extremely hard to shake off, and who cares? Nobody. These companies really expect you to pull money our of thin air! It’s really scary and reinforces the fact that you need to do your research, plan accordingly and live within or below your means. The smallest drum beats the loudest. Some of the most well-known billionaires drive an old car and live in a regular family home. Save your money, work on being an amazing person, and let other people do the boasting for you!