The supply chain is still on the struggle bus. The market’s v unpredictable. And inflation is getting scary (we see you, gas prices and insurance premiums). Your wallet is probably feeling the pain at every turn, and we have a feeling your car is too. So we teamed up with the experts at Safelite® to compile a few things you oughta know about owning a car in this economy.
1. An emergency fund is a must-have
Sometimes in life, the unexpected happens. And sometimes it happens to your car. Ease the subsequent rush of panic by setting up an emergency fund.
AAA pegs the average car repair bill between $500 and $600. That’s…not cheap. Case in point: 64 million American car owners said they would have to borrow money to pay for car repair. But don’t worry. You don’t need to put hundreds of dollars away at once. Setting aside smaller chunks each month can get you financially prepped. And we’ve got tips for that:
Create a dedicated account. Rather than mentally earmarking monthly contributions, set up an actual emergency fund through your bank. Bonus points if you make one just for car expenses.
Set up auto-transfers. Schedule an automatic transfer from your paycheck or checking account to your dedicated account so you don’t have to lift a finger.
2. Keeping up with maintenance and repairs can save you $$$
Not-so-fun-fact: One-third of American car owners delay or skip maintenance completely. And that can lead to mechanical problems or a roadside breakdown. Plus heftier repair bills.
Example: You’re driving and a rock hits your windshield, leaving a small chip. It might seem like no biggie. But chances are a chip will grow into a crack, making your car unsafe to drive. And repairing a small chip before it spreads costs a lot less than replacing the whole windshield. Luckily our friends at Safelite make windshield repairs and replacements suuuuper easy. You can book an appointment in minutes online for one of their many locations. In most cases, they’ll even come to you.
3. There are ways to save on insurance
Insurance is like a safety net that catches you when you fall. It might feel like you’re spending a lot on nothing but a) car owner life could get a lotttt more expensive without it and b) most states require you to have coverage. The silver lining? There are ways you can save major $$$. Here are a few:
Practice safe driving. Easier said than done. But a lot of insurance companies offer discounts to anyone with a clean driving record.
Shop around. You’re not married to your current insurance provider, so feel free to explore what else is out there. Get quotes from other companies to see if you could get the same coverage for less.
Work on your credit score. That three-digit number is one of the many ways insurance companies decide how much you should pay. If you’ve got a high score, you’ll likely have a lower premium.
4. Sometimes, you gotta upgrade
Buying a new car involves a combo of excitement and stress. Especially these days (hiiii, inventory issues and inflation). But understanding when it’s time for a new one vs. sinking $$$ into your old one can help you save in the long run. Here are a few things to consider:
Maintenance cost: Does your car spend more time at the shop than in your garage? It might be time to start shopping around.
Hot features: The latest models are bound to have the latest and greatest (think: backup cameras and blind spot monitoring).
Fuel efficiency: Newer cars are probably more fuel efficient than the one you’re driving. Depending on your car’s current MPG (hint: miles per gallon), upgrading could save you up to $1,000 per year at the pump. Oh, and the Inflation Reduction Act means you can cash in on tax credits if you buy an electric vehicle. Not paying for gas ever again and lowering your taxes? Talk about a win-win.
One more heads-up: If you end up needing a windshield replacement on that spiffy newer vehicle, you’ll likely need your advanced safety system recalibrated too. Because when you have your windshield replaced, the forward-facing camera attached to your rear-view mirror needs to be recalibrated to manufacturer standards so features like emergency braking and collision warning continue to work properly. It sounds complicated, but the TLDR is Safelite takes care of it all in the same appointment.
5. Car shopping in today’s market is…tricky
Supply chain constraints and economic conditions are rattling the auto industry. But what does that mean for anyone on the hunt for a new ride?
Limited inventory. If you walk onto a dealership lot, don’t expect to see as many options as you have in the past. Since manufacturers are limiting production, flexibility is key when it comes to colors and models. Especially if you want your car sooner rather than later.
Loans could be more expensive. ICYMI: The Fed has raised interest rates (which influences what you’ll pay to borrow money) five times already this year. Experts expect they’ll keep at it. And higher rates can mean higher payments, which could impact your budget month after month.
Buying and owning a car in today’s economy is no walk in the park. But being financially prepped and understanding the current state of the auto market will make the experience wayyyyy less stressful.
Sign up for the Daily Skimm email newsletter. Delivered to your inbox every morning and prepares you for your day in minutes.