Why You’re Probably Spending More On Your Car Than You Should

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Why You’re Probably Spending More On Your Car Than You Should

As modern parents, we’re always trying to manage our household expenses as best we can and stick to that meticulously planned household budget. As such, most parents are masters of meal prep; we know how how to use our free time to batch cook healthy, nutritious yet savory meals for the whole family which can be frozen and perfectly portioned throughout the week thereby saving money, keeping the expensive allure of take out and restaurants at bay… and helping out the family’s waistlines, too. We also never replace when we can repair, repurpose or recycle. We may even make our own cosmetics, toiletries and cleaning products out of such quotidian substances as cider vinegar, baking powder, coconut oil and essential oils. Yup, it’s safe to say that you and your family have most areas of the family’s financial planning on lockdown.

And yet almost all of us are paying over the odds in one vitally important areas of our day to day lives. An area in which we’ve become so accustomed to inflated prices and unreasonable deals that we almost expect to get ripped off. That’s right we’re talking about cars. Most of us are paying too much for our cars in some way or another. From the purchasing of our cars themselves to the servicing and repairs to the insurance and even the fuel on which we run them. Even when we think we’re getting a good deal, it can often be a false economy that costs us more in the long run. Here we’ll look at some of the myths and assumed “common sense” arguments that have seen legions of us fork out more on our vehicles than we need to while actually getting fewer real terms benefits. It’s time to slay the dragons of misinformation and save a pot of gold!

The “New cars are a waste of money!” fallacy

When we’re in our teen years, working a part time job alongside our studies or in our early twenties and at the start of our careers, it would stand to reason that we’d gravitate towards used cars that aren’t in the best condition. Our circumstances dictate that we need an automobile and we go for the cheapest one that we can afford. Sure, we make sure that there’s some mileage left in the tires, the suspension isn’t leaking fluid and that the engine acts and sounds as it should, but we’re motivated more by price than the quality of the vehicle itself.

In our adult years we can afford to be a little more discerning. Not only will your car be your workhorse, accompanying you safely and reliably on your daily commute, it will also be responsible for your childrens’ safety when you take them to school or on family trips. Thus, as our circumstances change we begin to see the false economy that can come with buying used vehicles.

Although there are a great many quality used and nearly new vehicles on the market, many of us don’t consider the cost advantages of buying new or that it may save money in the long term. While an older used vehicle may present a smaller upfront overhead, you will not have the benefit of a manufacturer’s warranty and depending on the mileage you may face yourself with a four figure repair bill within months of your purchase.

That old adage that your car loses value as soon as it’s driven out of the lot holds some water, but it’s ultimately an oversimplification. Your vehicle’s value is determined by its age, its mileage and condition as well as some of the more arbitrary whims of the market. In fact, when you think about it a new vehicle offers you much better resale value if and when you decide to upgrade. You also have the benefit of a manufacturer’s warranty (usually 3 years) which covers the cost of any repairs needed should a manufacturing defect cause a fault with your car. If you’re getting your car on finance, you will also be able to command more favorable rates. Finally, as the dealerships have a larger profit margin on new vehicles you are afforded much more bargaining power when it comes to working towards a price you’re happy with. Check out Car-Buying-Strategies.com for details. There’s a huge difference between the factory invoice cost and the true dealer cost and knowing this can make all the difference when you’re coming up with a reasonable asking price on a new vehicle.

Servicing your car at an independent repair shop

Most of us have a repair shop that we go to for our annual road safety checks, emissions testing, servicing and repairs. We’ve gone to them for as long as we can remember and since their pricing is generally pretty competitive we’re happy to keep giving them our business. After all, who’d get their car serviced at a main dealership? Everyone knows that they rip you off, charge you over inflated prices and send you out the door wondering where all your money went, right?

Well, not necessarily.

Taking your car to a main dealer has some clear advantages that could save you a lot of money in the long run. Although there’s no denying that your local independent auto repair shop may be able to make an upfront saving, loyalty to your main dealer is likely to reap long term dividends. Right off the bat, you know that your vehicle will be serviced or repaired using only genuine parts. This might not seem like a big deal but non genuine or generic third parts carry with them a risk of disproportionate wear or even long term damage to your vehicle.

If you take your car in to a main dealer to get repaired, the manufacturer will likely also be able to offer a 2 year parts and labor warranty meaning that should any aspect of the repair fail within this period it will be repaired again gratis. It’s extremely unlikely that your local shop will be able to offer this. Moreover, main dealers are rigorous in their training and recruitment standards for technicians meaning that  you are afforded the peace of mind of knowing that a top tier technician is working on your vehicle. Finally, unlike independent shops, main dealers have considerable budgets for customer retention. In an age where consumers have more options than ever, big businesses are prepared to cut into their own bottom line to buy your loyalty. This means that they are better positioned to reward your loyalty with goodwill discounts on future services, repairs and possibly even on your next vehicle.

Are you asking for discounts when you renew your car insurance?

Most car insurance companies hope that when the time comes to renew your insurance, you’ll just let it roll over and auto renew. They know you’re busy and juggling the myriad responsibilities of negotiating a career alongside parenthood. Thus, they’ll likely bump up the cost of your premium significantly from last year and hope that you won’t notice. In some countries, like the UK, efforts have been made to clamp down on this ethically dubious practice but even if you’re lucky enough to live in a country where this practice is not commonplace, you likely underestimate just how important your loyalty is to your insurance company.

Sometimes, saving a small fortune on your insurance is as simple as making a phone call. When your renewal comes up, give them a call and ask them what sort of discounts they’re prepared to offer you to incentivize you to stay. They’re unlikely to offer these to you out of the goodness of their hearts but if you dig your heels in you may be surprised by the lengths they’ll go to to keep you from straying into the arms of their competitors. If they don’t arrive at a sum you’re happy with, simply take your custom elsewhere.

Setting up a new car insurance policy is mildly tedious and takes up a few minutes of your time but it’s infinitely preferable to spending over the odds on your insurance policy.

But keep in mind, you don’t have to stay with your insurer for a year

If your insurer offers you a substantial discount when you renew this does not mean that you are locked into a contract that’s set in stone. Indeed, one of the most persistent insurance myths out there is that most policies don’t have an opt out clause. The reality is that most insurance policies can be opted out of at any time. Not only do they usually offer a 2 week period within which you can change your mind without consequence, but you can opt out at any time if a better offer comes along. You may face a cancellation fee and some paperwork but this may be a hit worth taking for superior cover at a better price.

In the digital age, where consumers have more options than ever, most industries (but the auto industry in particular), are desperate to get and retain your custom. So stop letting paying over the odds and start making them work for their money!