Have More Money
Reduce Auto and Travel Expenses
(Last updated: December 29, 2009)

This page shows how to have more money by reducing your automobile and travel expenses. Automobile and travel expenses are one of the main living expenses for many people. By reducing these expenses, you can have more money for other things.

These suggestions are offered for your consideration. Perhaps they can guide you to a better life style. But the final choices are up to you.

Here are the topics:

Automobile expenses

Buying an automobile
Claiming income tax deductions
Reduce auto finance charges
Reduce auto gasoline costs
Reduce auto insurance costs
Reduce auto repairs and maintenance
Other ways to reduce auto expenses
Selling your automobile

Travel expenses

Air travel
General travel

In order to reduce your automobile and travel expenses, you may have to do some planning and change some of your habits and preferences. Whether the money you can save is worth the effort is up to you.

IMPORTANT

Before using this information to reduce your living expenses be sure to read the following notice: Disclaimer

Buying an automobile

Instead of buying a new car, you can save a lot of money by buying one that is two or three years old. It is during this initial life of a new auto that it loses value rapidly. In addition, if the new car has a five-year warranty then you can benefit from the last years of this warranty.

Try to buy an auto that does not require premium grade gasoline and that gets good gas mileage. You can use the government Fuel Economy website to compare the gasoline mileage for different autos.

There is an old saying that the best time to buy an auto is near the end of the month. Supposedly, this is when salespeople have to meet their quotas for the month and they will be willing to give you a better deal.

Desirable features

Certain expensive car features, such as automatic transmission and air conditioning, make driving more convenient and comfortable. However, you should be aware of what these features cost. Then you can decide if the extra cost is worth it.

When buying a new car, don't spend money for accessories or options unless they contribute to your comfort, needs, or safety. Get a list of possible accessories and options and decide which ones are worthwhile. Don't wait until you are in the clutches of a sales person.

How long should you keep your present auto?

If your existing auto still gives you reliable performance and does not have excessive operating or maintenance expenses, maybe you should keep driving it instead of buying another auto.

Modern cars should last for eight or ten years, or 200,000 miles, if they have been properly maintained.

How much can you afford?

You might want to plan a new budget for your living expenses before you purchase an auto. Consider the car payments and any increase in other car expenses, such as insurance and maintenance. You may not be able to afford the purchase or you may find a better use for the funds.

When buying a car, you can save money by buying a smaller model. This gives you both a lower purchase price and it saves money on your insurance, finance charges, and operating expenses.

Inspecting the car before you buy it

Before deciding to buy a particular used car, it is always a good idea to have a mechanic inspect the car. This can save you a lot of trouble and expense if the car needs some immediate repairs. If you still want to buy a car with "problems," you will be in a position to ask for a lower price.

Look at the tires on the car you intend to purchase. Do they have a lot of tread left on them? Are they all-season tires?

If the tires have uneven wear, this may indicate possible problems with the tire or the auto itself.

Be wary of an auto that has been involved in a serious accident, or has flood damage. It may look okay on the outside but can have hidden damage.

It may be worthwhile to review the history of a particular auto at the CarFax website.

What type of vehicle should you buy?

It's usually better to buy the kind of vehicle you'll be using most of the time. Thus if you only need a pickup for occasional use maybe you can borrow one from a friend or rent one for a day or so.

If you are thinking about buying an SUV, be sure that you really need this type of vehicle. They tend to be more expensive and have poorer gas mileage.

When buying a used car, you might want to seek out a car that had been leased. The previous owner of these leased vehicles probably kept them in good working condition because of the terms of the lease.

The following websites can help you when choosing a new or used car to buy:

Best and worst used cars -- The most reliable models and the ones to avoid, as determined by CosumerReports.org®.

CarAndDriver -- They claim to be the "worldwide leader in providing objective test results and expert vehicle reviews, and it's here that you can get the inside scoop on every vehicle for sale in the US."

CarMax -- This is a nationwide network of used car dealers. You can search their inventory online. (This is where I bought my last used car.)

Cars.com -- They provide buying guides for new and used cars. They claim these guides provide "expert and consumer reviews, features, photos, and videos."

Edmunds -- They provide "True Market Pricing®, car reviews, ratings, & advice to help you get a fair deal." They cover new and used cars.

Claiming income tax deductions

If you are going to claim income tax deductions, you need to keep good records on the mileage and purpose of business trips.

When claiming a deduction on US income tax returns, many people have a choice of taking a standard business mileage rate or the business portion of depreciation and actual expenses.

Reduce auto finance charges

Let's say your current credit score isn't very good. Maybe you should wait on your intended car purchase until you can improve your credit rating. You can get an estimate of your credit scores at Credit Report from MSN Money.

After you have decided on a likely car purchase, compare the interest rates on a dealer loan with other loans available. Then you can use whichever loan has the lower interest rate.

If interest rates have come down substantially since you financed your auto, you might want to look into refinancing your auto.

Reduce auto gasoline costs

GasBuddy.com
GasPriceWatch.com

This website lets you download a free program to track your gasoline mileage:

Gas Mileage Tracker

Reduce auto insurance costs

Note: The insurance company's payout is limited to the coverage provided by the policy, less any deductible amount.

Liability insurance -- This coverage is required by most states. This insurance is to protect other people from being harmed by your vehicle. It consists of two different types of coverage, bodily injury (BI) and property damage (PD).

You have to carry at least the minimum coverage required by your state. You may choose to carry a higher coverage to protect you (up to the policy limits) from lawsuits resulting from a destructive accident.

The bodily injury coverage provides money to other people who are injured or killed.

The property damage coverage provides money to other people for damage done to their vehicle or other property.

Collision insurance -- This coverage reimburses you for damage to your vehicle resulting from a collision with another vehicle or other object.

If you have a lease or loan secured by your vehicle then the lease company or loan company probably will require you to have this coverage on that vehicle. If you own the vehicle outright and it is not worth much, then most people would drop this coverage.

Comprehensive insurance -- This coverage reimburses you for those damages to your vehicle not resulting from collision. This includes theft, glass breakage, and damage by flood, fire, or animals.

If you have a lease or loan secured by your vehicle then the lease company or loan company probably will require you to have this coverage on that vehicle. If you own the vehicle outright and it is not worth much, then most people would drop this coverage.

Uninsured or underinsured bodily injury -- This coverage reimburses you, insured members of your household, and your passengers for bodily injury or death caused by another motorist who is either uninsured or underinsured.

Uninsured or underinsured property damage -- This coverage reimburses you for damage to your vehicle caused by another motorist who is either uninsured or underinsured.

You might opt for this coverage when you don't have collision insurance, or you don't want to be liable for the deductible on your collision insurance.

Personal injury protection -- This coverage, if available in your state, reimburses you, relatives in your household, and your passengers for bodily injury or death.

You might opt for this coverage if you don't have adequate medical insurance or you frequently drive with passengers.

How to save money on insurance premiums

Increasing the amount of your deductibles will lower the insurance premiums.

Consider dropping the comprehensive and collision coverage on your car if you own it free and clear and it isn't worth very much. Also consider dropping add-ons that you rarely use, such as towing coverage.

You can usually save money on insurance by not going through the dealer where you bought the car. The dealer usually gets a commission on this insurance, which increases its cost.

Ask for all the discounts you are entitled to receive.

Relax when you drive. Don't become a victim of road rage, it might lead to an accident and hurt your insurance cost.

You might also save on auto insurance by having your home insurance and your auto insurance with the same company.

When buying insurance for your teenage children, it usually will be less expensive to add them to the parent's insurance policy.

Many insurance companies will give lower rates to teenagers who have taken student driver training in high school. It is also important for both parents and teenagers to have a good driving record.

Insurance companies also may give lower rates to people with good credit ratings.

AARP in association with the Hartford insurance Co. offers special rates to older people. Visit their website here.

When not to have high deductibles

You may want low deductibles, which increase your insurance premiums, if you don't have the resources to cover a high deductibles amount in case of an accident.

Another reason you may want low deductibles is if any inexperienced drivers are covered by the policy. They increase the odds of having an accident with your vehicle.

If you have a lease or loan secured by your vehicle then the lease company or loan company may not allow high deductibles on the collision and comprehensive insurance they require.

Where to buy insurance

There are websites that let you compare insurance costs for different companies in just a few minutes. Here are some websites you can use:

AutoInsuranceQuotes.com
CarInsuranceQuotesComparison.com
CheapInsuranceRates
OnlineAutoInsurance.com
QuoteScout®
QuoteWizard
SaveTodayAutoInsurance

Reduce auto repairs and maintenance

For routine maintenance, you can probably save money by going to a specialized service chain like Oil Can Henry's.

However, if you have a serious problem with your vehicle, it's probably better to bring it to a dealer's repair shop.

If your auto is under warranty, you need to have certain work done by a certified mechanic. Check out the requirements of your warranty.

When you purchase tires or have any repairs that come with a warranty, keep the receipt and warranty in an envelope in your glove box. Add the date and terms of the warranty to your log of maintenance work done.

When getting an oil change, don't pay for expensive oil unless your car engine needs it.

Some experts recommend getting an oil change every 3,000 miles, regardless of what the owner's manual recommends. This might make sense for a new auto, but it probably doesn't help much for an older car.

Check your fluid levels and tire pressure on a regular basis. Follow the recommendations in your car owner's manual.

Fix problems while they are just starting. Don't wait until you have a big repair bill.

Wash and wax your own car unless that would be impractical.

If you have a Costco membership, this is probably a good place to buy your car tires.

Winterize your car before the rush starts. You don't want to be caught in an unexpected freeze or snow.

Maintenance jobs you can probably do yourself:

• Check the fluid levels for coolant, oil, power steering fluid, and windshield washer fluid
• Purchase and change the windshield wiper blades
• Maintain the proper tire pressure
• Purchase and replace one of the new high-intensity headlight bulbs

RepairPal -- They give you "independent and unbiased repair estimates, user ratings and reviews, plus advice you can't get anywhere else." They can also provide "The best repair shops near you, with ratings and reviews."

Other ways to reduce auto expenses

Avoid using toll roads when possible and practical.

Go to this website to find where to get your car owner's manual online.

Selling your automobile

Sell your existing auto and buy a better one

Here's the first alternative. Sell that gas hog and get a fuel-efficient car. You may be losing some comfort and prestige, but it may be worth it. The choice is up to you.

Sell your existing auto and don't replace it

Here's the second alternative. Sell the car and use the bus (or some other public transportation). This presumes that the public transportation where you live provides an acceptable means of getting around. Here again, the choice is up to you.

Air travel

AirTran -- This is a low-fare airline that offers business class travel to various cities in the United States and surrounding areas.

CheapFlights.com -- Find cheap flights on their website and then book the tickets through them.

CheapOair -- They offer cheap air travel on their website. Save up to 65% on flights, all airlines.

Southwest.com -- They have low fares and let your bags fly free.

MyAirfareSecrets -- Website of guy who sells an e-book that he claims will save you money on airfares. (Note: I don't provide any guarantees that the author is legitimate or the information is worthwhile.)

General travel

Bing -- Use the search term "cheap travel" to find applicable websites.

Expedia -- They offer discounts on flight, hotels, car rentals, cruises, and activities.

GottaGoDiscount -- They offer discount air, domestic tours, tour packages, home and resort rentals, hotels/car rental/Eurail, international travel, and vacation packages, with personal service and expert advice.

Hotwire® -- They use a Hot Rate ® Locator to find low rates on hotels, car rentals, flights, cruises, and packages.

Orbitz -- Set your price for flight, hotel, car rental, activities, and cruises. They'll find a match and notify you.

Priceline.com -- They help you find the best deals on flights, hotels, car rentals, vacation packages, and cruises.

Travelocity -- Save money on vacation packages, flights, hotels, car/rail, cruises, and last minute packages.

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