Tricks to Lower the Cost of Owning A Car

You may think the cost of owning a car is only the monthly payment, but there’s much more to it than that. The costs can actually add up quite quickly. To figure out the true cost of owning your car, you need to calculate insurance costs, fuel costs, and monthly maintenance costs. Check out these factors that can increase the monthly cost of owning a car.

Monthly Payment

The amount you agreed to pay each month for your car is the most basic and often the only common focus of owning a car. The purchase price you pay can be impacted by sales tax, state registration fees, and licensing fees. You can lower your monthly payment by being knowledgeable about the car before you buy it. Know how much the car is actually worth by assessing its value using Kelly Blue Book or TrueCar. This will also help you find the true value of your trade-in, so you get the most for it. Additionally, some hybrid and electric cars come with tax credits and rebates, which can help offset the monthly payment.

Interest Rate

If you purchased your car by financing it for a period of time, the interest charges can add a lot to the true cost of owning a car. Don’t ever let a dealership finance you using their services. Ask your current financial institution for a pre-approval offer from several lenders before hitting any dealership. Doing this helps lock in a low-interest rate before the car has even been purchased. Checking your credit report beforehand can ensure that all accounts are up to date and accurate before looking to secure a loan.


Cars lose their value over time, even if they are well-maintained. Depreciation factors into the true cost of owning a car if the value of your car declines faster than you can pay it off. A car that depreciates in value quickly can be a detriment when it comes time to upgrade. Buying a used car can alleviate some of the depreciation problems since used vehicles depreciate slower than newer cars. New cars can lose as much as 10% of their value the instant they’re driven off the lot.


Insurance coverage for your vehicle is required by law in most states, but the rates you pay will depend on where you live. One way to save on vehicular expenses is by getting cheap auto insurance. Another way is to shop around for at least three quotes to find the most affordable rate. Remember that your driving record will impact your insurance rates, so being a safe driver is one way to save money. Some states like Oregon are testing pay-per-mile insurance programs, where you only pay for the miles you drive.

Fuel Costs

Aside from the initial monthly payment, fuel costs are the second-highest cost associated with owning a car. That gets even more expensive if you own a gas-guzzler like a truck or SUV. Pay attention to fuel efficiency when shopping for vehicles, as this is where you have the most potential for savings. A more fuel-efficient vehicle means you pay less to keep it full over a period of five years.

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