For many households, a car is the second-largest expense after housing, and it is often necessary for getting to work, school and medical care. The good news is that several of the biggest costs, insurance in particular, can be lowered with a few phone calls. This guide covers practical ways to spend less on owning a car and what to do when you cannot keep one.
Three quick wins
- Get at least three insurance quotes and ask each company for every discount you might qualify for.
- Review your coverage and mileage, and update the insurer if you drive less than before.
- Ask your mechanic for a written estimate and a second opinion before any repair over a few hundred dollars.
Lower your car insurance
Insurance prices for the same driver can differ a lot between companies, so comparing is worth the effort.
- Shop around at least once a year and after big life changes such as moving, marriage or a new job.
- Ask about discounts. Common ones include safe driver, low mileage, bundling with renters or homeowners insurance, paying in full, paperless billing, good student, defensive driving courses and safety features on the car.
- Raise your deductible if you have savings to cover it. A higher deductible lowers your premium.
- Review coverage on older cars. If a car is worth little, collision and comprehensive coverage may cost more than they would ever pay out. Keep the liability coverage your state requires.
- Consider usage-based programs that price your policy by how you actually drive, if you are comfortable with the tracking.
- Do not drive uninsured. Fines, license suspension and the cost of an accident are far worse than the premium.
A few states, including California and New Jersey, run low-cost auto insurance programs for eligible low-income drivers. Check your state insurance department’s website or ask about it when you call 211.
Keep repair costs down
- Keep up with basic maintenance. Oil changes, tire pressure and fluids are much cheaper than the repairs they prevent.
- Get written estimates from at least two shops and ask them to explain what is urgent and what can wait.
- Ask about used or refurbished parts and independent shops, which can cost less than dealerships.
- Look for community help. Some nonprofits, churches and local agencies offer repair assistance or low-cost vehicle programs for people who need a car for work. Call 211 and ask about car repair or vehicle programs.
- Know your warranty and recalls. Safety recalls are repaired free at dealerships. Look up your vehicle identification number on NHTSA’s recall site.
Spend less on fuel
- Keep tires properly inflated and remove unneeded weight from the car.
- Combine errands into one trip and avoid hard braking and rapid acceleration.
- Compare prices with a gas price app, and use pharmacy or grocery fuel rewards if you shop there anyway.
- Carpool with coworkers or neighbors to split the cost.
Be careful with car financing
High-interest car loans, “buy here, pay here” lots and title loans can trap people in debt. If you need a car, get pre-approved through a credit union or bank before visiting a dealer, compare the total cost and not just the monthly payment, and avoid loans that use your car title as collateral. A free HUD-approved or nonprofit credit counselor can help you review options.
If a car is out of reach
- Public transit. Many systems offer reduced fares for low-income riders, seniors, students and people with disabilities. Employers may also offer pre-tax transit benefits.
- Medicaid rides. Medicaid covers non-emergency rides to medical appointments in every state for eligible members.
- Volunteer and nonprofit rides for older adults and people with disabilities.
- Bicycling and walking programs. Some cities run low-cost bike share or refurbished bike giveaways.
Our guide to transportation help explains each of these in more detail, and 25 practical ways to cut your monthly bills has more ideas for lowering your overall costs.