Owning and operating a vehicle is expensive. It’s often the second highest household expense. So this is one area where cost-cutting can have a big impact. We’ll offer some advice to help you trim those costs today on MoneyWise. 
<ul><li>For some reason, the automobile category in the family budget never seems to get the scrutiny it should. We take for granted the need to drive without counting the cost.</li><li>As a depreciating asset, you lose money on a car even when you’re not driving it. </li><li>Then add the cost of financing, insurance, taxes and fees. Make no mistake, cars are expensive.</li><li>Now, we always tell you that buying a late model, dependable, used vehicle is the best way to get value for your dollars. But that’s not an argument for only buying used vehicles. </li><li>When financing a used car, once you pay it off, you should continue to make the payments to yourself, saving that money for the next vehicle purchase.</li><li>As you do that, you’ll be able to make a bigger down payment on the next car. Keep doing it, and eventually you’ll be able to buy a new car outright with cash.</li><li>I say all this because a recent <a href="https://humbledollar.com/2022/01/driving-lessons/">article by the Humble Dollar</a>
advocates a “buy used and hold” approach with a long list of strategies for getting the most out of your driving dollars when purchasing a car. Here are a few tips: </li><li>1. THREE YEARS OLD: You want to look for a vehicle that’s about three years old. And, typically, it should have between 20,000 and 50,000 miles on it. You won’t get that new car smell, but you’ll save a lot of money, and you’ll probably get years of trouble-free driving.</li><li>2. HANG ONTO IT: you want to keep that car for a very long time, so be diligent about maintenance. Try to hang on to the vehicle for at least 10 years, and the goal is to get around 150,000 miles out of it.</li><li>3. BEWARE OF EXTENDED WARRANTIES: You’ll get a lot of “warranty expired” notices. Ignore them and don’t get an extended warranty. Most people who purchase extended warranties never use them and it’s money down the drain.</li><li>Instead, set aside $200 to $250 a month to maintain older cars. Figure that about half of that will go toward routine maintenance, and the other half is available for repairs.</li><li>On the other hand, If you purchase a new vehicle, AAA says you should be able to get by with budgeting only $75 to $150 a month.</li><li>But there’s another benefit to buying late model, used vehicles. You’ll probably be able to drive higher-end models that you couldn’t afford if buying new. Think Toyota over Chevy. BY buying used, you may be able to get a vehicle for as much as 50% off the original sticker price.</li><li>MAKING THE PURCHASE</li><li>Now, all of this doesn’t happen by itself. You’ve got to put in the time and energy to find the right used car. There are plenty of online resources to get you started: AutoTrader, Cars.com, ebay and Craigslist to name a few.</li><li>You’ll probably save money buying from a private seller, rather than a dealership, but you won’t get a warranty. Always have the car inspected by an independent mechanic and get the vehicle history report from CarFax, Bumper or another service.</li><li>If you’re buying a used vehicle from a dealer, you’ll probably pay more, but expect to get new tires, brakes, and an oil change. That could be worth up to $1000. You’ll also get some kind of warranty when buying “used” from a dealer. This can vary widely with the best being 3-years or 36,000 miles.</li><li>WHEN IT’S THE END OF THE ROAD</li><li>Now, how do you know when it’s time to get rid of a vehicle? Keep in mind that in the majority of cases, it’s cheaper to repair your current vehicle than to purchase another one.</li><li>But eventually, every vehicle must be replaced. The automotive site Edmunds says it’s likely a good idea to replace your car when repair costs are greater than the vehicle's value - or one year's worth of monthly payments on a replacement. </li><li>When you know that a vehicle is nearing the end of its serviceable life, start looking for its replacement. Don’t wait for it to die.That way you can take your time and not be rushed into buying something right away.</li></ul>On this program, Rob also answers listener questions: 
<ul><li>What is the best way to save or invest for a child’s college education? </li><li>Is The Timothy Fund a good option for a Christian investor? </li><li>What is the best way to buy a used car? </li><li>Should you use a monthly surplus to invest or to save for home purchase? </li></ul>RESOURCES MENTIONED
<ul><li><a href="https://www.eventidefunds.com/">Eventide Funds </a></li><li><a href="https://www.praxismutualfunds.com/">Praxis Funds</a></li><li><a href="https://www.inspireinvesting.com/">Inspire Investing</a></li><li><a href="https://timothyplan.com/">Timothy Plan</a></li></ul>Remember, you can call in to ask your questions most days at (800) 525-7000 or email them to <a href="mailto:questions@moneywise.org">Questions@MoneyWise.org</a>. Also, visit our website at <a href="http://moneywise.org/">MoneyWise.org</a> where you can connect with a MoneyWise Coach, join the MoneyWise Community, and even download the free MoneyWise app. Like and Follow us on Facebook at MoneyWise Media for videos and the very latest discussion! Remember that it’s your prayerful and financial support that keeps MoneyWise on the air. Help us continue this outreach by clicking the <a href="https://moneywise.netviewshop.com/donate2">Donate tab on our website</a> or in our app.

FaithFi

Faith & Finance is a daily radio ministry hosted by Rob West. The program offers a practical, biblical and good-natured approach to managing your time, talents and resources.

Faith & Finance with Rob West

The average family drives over 14,000 miles a year and spends more than $1500 in fuel costs alone.  Owning and operating a vehicle is expensive. It’s often the second highest household expense. But it’s also where cost cutting can have a big impact.

Keeping Car Costs Down

FaithFi | Feb 22, 2022

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Where Faith Meets Finance

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