From Know Your Options
There's no question: The cost of owning a car just keeps going up. And all too often, consumers feel they're at the mercy of unscrupulous mechanics, insurance industry bureaucrats and the mighty OPEC cartel. Car owners are feeling the pinch right where it hurts most. To put purchasing power back in your hands -- and real savings in your pocket -- try these tips.Pay (Less) at the Pump
With gas prices at nearly their highest levels ever, chances are you're tired of emptying your wallet every time you fill up the tank. Not to worry. There's plenty you can do to ease the pain until the prices drop.
Shop smart. Gas prices can vary by as much as 15 cents within a few square miles, says Jason Toews, co-founder of gasbuddy.com, a website that helps you find the best prices in your area. But don't get carried away searching for a bargain: Drive too far and you'll run into the law of diminishing returns. To see whether the money you'd save at an out-of-the-way station would be eaten up by the extra miles you'd drive to get there, check out the calculator on bankrate.com.
When you do fill up, stick to the octane level recommended by the manufacturer. Unless there's a knock in your engine, says General Motors fuel scientist Bob Furey, paying more for higher-grade fuel is usually a waste of money.
Cruisin' in overdrive. Aggressive driving -- accelerating rapidly, braking suddenly, excessive lane changing -- doesn't just make you a hazard on the road. According to the U.S. Department of Energy, it can slash your highway gas mileage by 10 percent or more. With gas prices hovering around $2 a gallon, that's the equivalent of paying an extra 20 cents per gallon.
Even if you're steady at the wheel, watch your speedometer. Fuel efficiency peaks at about 60 mph. After that, factor in an extra 10 cents a gallon for each additional 5 mph.
To improve fuel efficiency on the highway, put on the cruise control or shift to overdrive. You'll maintain a constant speed and help your engine run more smoothly.
Are you road-ready? Basic maintenance is critical to maximizing fuel efficiency. Most drivers probably know that proper tire pressure improves gas mileage. Still, one in four cars have at least one under-inflated tire. Add some air, and you'll save up to 6 cents a gallon.
Pocket another 4 cents per gallon by ensuring that your mechanic uses the manufacturer's recommended grade of oil next time you're due for a change. Replace a clogged air filter and save 20 cents a gallon.
A less common problem is a malfunctioning oxygen sensor (it measures the oxygen content of your car's exhaust). Signs of possible trouble include a sluggish-running car, or a lit engine light on the dashboard. Replacing the sensor could save you as much as 60 cents a gallon.
And don't forget to check your gas cap regularly. Nearly 150 million gallons of gasoline evaporate into the atmosphere every year because of all the damaged, loose and missing caps.
Keep Up With the Upkeep
Few things can bust your monthly budget -- or jack up your stress level -- like an unexpected car problem. A little advance planning, though, can ward off unwelcome surprises.
Proactive pays. The best way to avoid unnecessary major repairs is to follow the maintenance schedule in your owner's manual. According to John Nielsen, director of auto repair and buying services at AAA, too many drivers ignore this basic advice. "Everyone buys a car," he says, "but no one reads the owner's manual." With diligent all-around maintenance, Nielsen says, you'll reap "tremendous savings" in the long run.
The big payoff comes in what Rich White of the Automotive Aftermarket Industry Association calls the "Cinderella era," which begins the moment you make your final car payment and lasts until the cost of maintaining your car outweighs the cost of buying a new one. By keeping a well-maintained car for an additional four years after it's all paid for, you could bank the new car payments and save as much as $10,000. That's a handsome bottom line -- and proof that maintenance matters.
Improve Your Profile
Find a mechanic you trust. Even the best-maintained cars need repairs at some point, so you might want to find a good dealer or mechanic before you've got an emergency. Ask friends and neighbors for recommendations, and then take in your car for a small job: the state inspection, tire rotation or to replace a few belts and hoses. See if you're comfortable with the service. It's a good sign if the mechanics are working on cars similar to yours and the shop is busy.Note if the mechanics are certified by the National Institute for Automotive Service Excellence (look for the blue ASE sign on display). Check the shop's record with the Better Business Bureau. For extra peace of mind, get a referral from AAA -- even if you're not a member. Repair shops have to meet tough standards to get on its approved list, and if something goes wrong, AAA will provide arbitration in a dispute.
When you've found a quality shop, establish a good rapport with your mechanic. "The No. 1 cause of consumer dissatisfaction is poor communication," says Nielsen. By building a solid relationship, you'll feel confident that you're getting what you paid for -- quality service at a reasonable cost.
Do it yourself. Cars have gotten so sophisticated, given all of the electronic gadgetry, that the days of tinkering under the hood are long past for most of us. But there are still some things even the most mechanically challenged among us can do to save money -- replace wiper blades and headlight bulbs, for starters. And anybody can install a new air filter: "It's like changing the bag in a vacuum cleaner," says Nielsen. Even if your mechanic performs some of these services for free, by doing it yourself you'll save on the parts, which can be marked up significantly.
Corroded terminals can damage connections between the battery and cable. Just take a stiff brush to the greenish buildup until it disappears.
Wash your car regularly, and wax it at least twice a year. Not only will it look great, but the protective coating will prevent damage from the rain, sun -- and even bird droppings.
Reduce Coverage Costs
Insurance rates have skyrocketed over the last five years. The good news is they may be leveling off, thanks in part to higher industry profits and safer driving records. Rates are expected to rise 3.5 percent this year compared to a near 8 percent jump in 2003, according to the Insurance Information Institute (III). Some drivers may even see rate cuts. Here's what you can do to get the best deal.
Check all quotes. Prices can vary dramatically between insurance companies, so it pays to do your homework. Comparing policies, once a daunting task, has been made a lot easier by insweb.com, where you can get instant quotes from different providers. For links to state sites that offer price comparisons, try the National Association of Insurance Commissioners (www.naic.org).
The Web should only be a first step, though. Once you've narrowed it down to a few insurers, call them directly for detailed quotes. Visit iii.org for tips on picking a reputable firm.
Ask for discounts. Insurers consider a wide range of factors in determining your rate, including your age, driving history and residence. But there are ways to improve your insurance profile.
You may not realize that more and more insurers are using credit reports as an indicator of a driver's insurance risk. That's because studies show there's a correlation between good credit and low-risk driving.
Reduce your collision and comprehensive coverage by as much as 30 percent, says III's Loretta Worters, when you increase your deductible -- say from $200 to $500. Raise it to $1,000 and your savings could jump to 40 percent. If it's an older car, you may want to drop collision altogether. Dollarwise, it might not make sense.
Some insurers will cut your rate by as much as 10 percent if a child on your policy is away at college (and not using your car). And if your student has an A or B average, that could get you a further reduction.
Insurers may offer discounts if you carpool; insure more than one car; have been accident-free for three years; are over 55; have an antitheft system; have daytime running lights; are a longtime customer; take a defensive driving course; or insure both your auto and home with them.
Remember to factor in insurance costs when buying a new car, since some vehicles cost a lot more to insure than others. Take SUVs: They're not just gas guzzlers; they can also be an insurance black hole. Their high roll-over rate and the greater damage they cause to other vehicles in an accident often mean higher medical and repair costs -- and higher insurance rates.
A car's theft rate and safety record can also jack up your costs. Even vehicles in the same class can have widely varying fees as a result. Check the most recent rates for specific models with the National Highway Traffic Safety Administration (nhtsa.gov; search for "theft rates" and "NCAP"). Once you've narrowed your choices to two or three, call your insurer and compare current rates.
Seize the moment. Insurers continue to adopt ever more sophisticated pricing techniques. But don't lose heart. There are still deals to be had. With the right combination -- a good driving record, a high credit score or some mix of discounts -- you should be able to find an affordable rate. That's why shopping around today is more important than ever.