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    1. Picking a car
    2. Financing a car
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• Get Inexpensive Long Distance (Update, 1/19/07):  Get long distance for usually less than 3¢/minute.

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How To Save On Automobile Expenses

Car salesmen often turn on the pressure with car buyers, so you can really get gypped if you don't take the time to compare offers, examine all your options and think about what you really want.  The first few articles on this page will list some things to think about when buying cars.  Use this page to put yourself in the best possible car, operate it inexpensively and drive away with some extra cash.


  1. How To Pick The Right Car At The Right Price
Here are some great sites to help you decide which new or used car is the best buy:

  • CarsDirect.com Car Buying Guide: This interactive decision guide will quiz you on what you're looking for in a car, then list the cars that best suit your wants and needs.  There's also a used-car buying guide on their site.

  • Car and Driver's Buyer's Guide: The popular car magazine covers cars for the last 3 years.

Here are the important points to consider if you want to save money on car purchases and maintenance:

  • You can often get an almost-new car at a discount of around $5000.  Many times, car lots will sell what are called "program cars" that have been briefly leased by corporations or car rental companies.  These cars are usually in excellent condition, but are lower-priced due to high mileage (in excess of 15,000 miles per year).  If that suits your budget, ask some local car lots if they have any such cars in stock.

  • If you buy a 5-year-old car, chances are that you can buy it at 1/3 of its original price, yet it will have 2/3 of its life ahead of it.

  • Usually you can buy a car more cheaply and with less hassle from a private party than from a car lot.  Just make sure you have a mechanic check out the car to make sure it's not a lemon.

  • What's a fair price for a car? At Kelley Blue Book, you can see the usual sales price for both new and used cars.

  • You can actually look for used cars online.  Autotrader.com probably has the largest selection of used cars.  The Statewide Car Connection has used cars sold both by private parties and dealerships.  The also provide financing and insurance quotes.  Try Ebay Motors for another large and well-maintained listing of ads for used cars.



     
 
 
What To Do Now:
 
Time to complete:  Varies
Money you'll spend:  $0
What you'll get:  Savings when you buy or finance a car.
Step-by-step instructions: 

  1. Click here: CarsDirect.com Guide.  A new window will open.

  2. Follow the online instructions to figure out which make and model is right for you.
Further Reading:


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  2. Finance (Or Refinance!) Your Car At A Lower Rate
You can often save hundreds and sometimes thousands of dollars by financing your car at the lowest rate possible.  The car dealership will always pressure you to use their financing, or they'll suggest a bank that will give them a commission for the favor.  Don't fall for it!  You can almost always find a better deal online.  If you've already gone with dealer financing for your current car, remember that you can very likely refinance at a lower rate online.

Capital One Auto Finance (which used to be called "PeopleFirst.com" before Capital One bought the company for $150 million in 2001) gives you a $100 service satisfaction guarantee: if you're not satisfied with your experience with their services, fill out a questionnaire and get $100 back.  You apply online and within 15 minutes, they contact you with a car loan decision.  There is no application fee, no down payment, and no prepayment penalty.  They then give you what they call a "blank check", which you can present to nearly any new or used car dealer.  The "blank check" isn't redeemable for money, but it does show the dealer that you're pre-approved and already financed for whatever car you're going to buy.  This gives you an edge in negotiations.

     
 
 
Finance (Or Refinance!) Your Car At A Lower Rate
 
Time to complete:  10 minutes
Money you'll spend:  $0
What you'll get:  Hundreds of dollars in savings on the interest you pay, in most cases.
Step-by-step instructions: 

  1. Click here: Capital One Auto Finance .  A new window will open with this page.

  2. Follow the online instructions.
Further Reading:


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  3. Your Next Car: Buy Or Lease?
Leasing a car can mean a low downpayment and lower car payments.  The dealership is responsible for maintenance, so you'll have less to worry about there.  But over a long period of time, leasing will cost more than buying a car.  Often you'll have to pay more for insurance when you lease a car: ask the dealer exactly what type of insurance you'll need to buy.  The dealer won't allow you to customize the car, and if you mangle it in an accident you'll pay a steep penalty.  If you plan to buy the car at the end of the lease, you're probably better off buying the car right away instead.  Whether you lease or buy, always negotiate with the car dealer to get the lowest possible price.

Leasing often makes sense in these situations:

  • If you don't drive much, you can negotiate a low mileage allowance that will lower your monthly payment.
  • In states with a high sales tax, you can often avoid it by leasing rather than buying.
  • If you want "more car for your money," you can do that because of the lower payments on your lease .
Try this Buy Or Lease Calculator to see if leasing is for you. Also, the Federal Reserve Board offers for free a publication called "Keys to Vehicle Leasing," which is available by calling 202-452-3244.

     
 
 
Your Next Car: Buy Or Lease?
 
Time to complete:  3 minutes
Money you'll spend:  $0
What you'll get:  Advice on buying or leasing your next car.
Step-by-step instructions: 

  1. Click here: Buy Or Lease Calculator.  A new window will open with this page.

  2. Print this page, it will have a lot of blanks to fill in.  As you research cars in your hometown or on the Internet, fill in the blanks.
Further Reading:


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  4. Learn Haggling Skills For Big-Ticket Items
There are two main rules to remember about haggling:

  • Never let anyone rush you into buying something.  Car dealers will try to tell you things like, "We shipped in four of those hard-to-find cars this month and there's only one left, and there's someone on their way in to look at it right now!"  Bull! They'll get in another shipment next week.  Real Estate agents will try the same tactic.  My advice: ALWAYS walk out of your first negotiation.  You can always come back later, after you've shopped around.  If that nice car or home is gone, "there's always more fish in the sea."

  • Like your negotiating opponent, but not too much.  Don't let yourself be charmed into buying something by someone who seems nice, but isn't necessarily looking out for your best interests.  Never make a big expenditure just because you like someone or what they've done for you.  Sometimes people will do something for you for the sole purpose of making you feel like you should return the favor.

Two articles at BankRate.com show you how to haggle for big-ticket items such as cars, jewelry, appliances and houses, where salesman are always playing games to get you to pay the heftiest price.  It's a good idea to read these two articles just before making a major purchase, to prepare yourself for the inevitable barrage of schmoozy salesman's avarice:

  • A little haggling can save a lot of money: Forget what's on the price tag, it's always negotiable.  Salespeople schmooze you, hook you and reel you in with tricky negotiation strategies.  But you can turn the tables on them by using some of those tactics yourself; it pays to be the fisherman instead of the fish.

  • Secrets of successful haggling: Here's the story of Super Haggler Larry Vellequette, an adept negotiator.  Larry enjoyed going to car dealerships when he was a teenager: "I would pretend I was going to buy a car, just to practice negotiating with a salesman," he explains.  "I would pick a young, energetic salesman and fish him for a while -- 'catch and release' style.  We would get close to a deal and I would say, 'No, never mind.'"  Larry shares his haggling secrets in this article.
When you're buying a used car, it's a good idea to learn about the various types of fraud you'll need to avoid.  Ask if you can check out the odometer readings in the repair records, and have the car independently inspected by a mechanic.

     
 
 
Learn Haggling Skills For Big-Ticket Items
 
Time to complete:  30 minutes to read these articles
Money you'll spend:  $0
What you'll get:  An education in the art of negotiating. 
The #1 Rule: 

  1. Remember: If negotiations aren't going the way you want, there's nothing wrong with walking out.  You can probably resume negotiations later, or find another offer elsewhere that's as good or better  "When in doubt, walk out."

  2. To see a complete tips page on how to buy a car, including a list of scams to avoid, use this form:

    Make:
    		Model:

Further Reading:


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  5. How To Maintain Your Car
Regularly maintaining your car will help extend its life, maintain fuel efficiency and increase resale value.  Here are my top tips for maintaining your car's value:

     
 
 
How To Maintain Your Car
 
Time to complete:  10 minutes per month
Money you'll spend:  A few dollars per month
What you'll get:  A long-lasting car
Car Maintenance Tips: 

  1. Changing your filters regularly will help promote your car's longevity more than anything else.  Oil filters and oil should be replaced every 3000 miles, while air filters should be replaced every 20,000 miles (more often, if you drive on dirt roads or in dusty conditions.)  The fuel filter and the PCV breather filter should be replaced at least every 30,000 miles.

  2. Spark plugs should be removed and checked every 30,000 miles.  In newer vehicles, spark plug wires no longer have to be replaced regularly.

  3. Follow your car manual's recommendations for replacing lubricants and fluids.

  4. Before starting any repairs, become thoroughly familiar with all the necessary parts and procedures.  Do not attempt to fix what you don't completely understand.

  5. Save all your maintenance records and receipts!  This will help you remember when your last performed maintenance, and if you sell your car that will help prove to the buyer that you maintained it well.

  6. Read Lengthen Your Car's Life (a Dollar Stretcher article) for more ideas.
Further Reading:


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  6. How To Deal With Mechanics
When you deal with car mechanics, use these precautions:

  • Try the authorized dealer of your car first, because they know the car very well and the repair may be free if it's under warranty or recall.  Then again, sometimes dealership repair costs are more expensive because they'll use factory-authorized parts, where other repair shops will use quality brand-name parts or reconditioned used parts at a lower cost.

  • Ask to see their manuals: if there's less than 12 feet of shelf space for manuals, they're probably not very well informed.  If the manuals look clean, or if they're all out-of-date, those are also bad signs.  A Computerized manual system is a very good sign!

  • A happy mechanic is usually a good mechanic (except for the occasional "charming con man", which you really have to look out for.)  If they treat you well and seem interested in helping you, that's another good sign.

Always get a written estimate before going ahead, and call some other shops to see if you can get a lower price.  Often a shop that specializes in a particular type of service (e.g. muffler shop) will give you a much lower price.

The Mechan-X Files at Cartalk.com is a huge database of above-average mechanics that was created by the cartalk.com community.  If you are looking for a great mechanic, select SEARCH and you can read the recommendations submitted by other Web sites for mechanics near you.

     
 
 
How To Deal With Mechanics
 
Time to complete:  A few minutes
Money you'll spend:  $0
What you'll get:  A good, honest mechanic hopefully
Step-by-step instructions: 

  1. Click here: Cartalk Mechanic's Database.  A new window will open with this page.

  2. Fill in the search box on the left side, then click Search.

  3. Click on a state, then click the button labeled Continue.

  4. Continue to follow the online instructions.
Further Reading:


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  7. Getting Better Gas Mileage
To save up to $500 per year on gas costs, just follow these tips:

     
 
 
Getting Better Gas Mileage
 
Time to complete:  A few minutes to read these tips
Money you'll spend:  $0
What you'll get:  $100-$500 per year in gas savings.
Best Gas-Saving Tips: 

  1. Watch your speed and accelerate gently (save up to 15%).
  2. Check your tires regularly and keep them inflated to the pressure stated in your car's manual (usually 32 PSI.)  You'll need to replace tires less often, and your savings could top $50 per year.
  3. Clear away unneeded items from your back seat and trunk. They slow you down and reduce mileage by about 5% per 100 pounds.
  4. Using radial tires can cut your fuel bill by 2-3%.
  5. Don't drive with an open sunroof or open windows, which increases drag.  Use your air vents instead.
  6. Keep your air filter and catalytic converter clean; this will save 5-10%.  Change spark plugs according to your car's maintenance schedule.
  7. Use the recommended gasoline for your car.  Most cars don't need anything more than 87 octane.
  8. Choose the route to your destination with the fewest stops and the flattest terrain (highways are almost always better than city streets.)
  9. Keep an eye out for which gas stations have the cheapest fuel.
  10. When you buy a car, don't buy anything bigger than what you really need.
Further Reading:


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  8. How To Avoid Auto Accidents
Driving seems routine, but even a small mistake can ruin your car and even your life.  Here are the 5 most important tips to keep in mind:

     
 
 
How To Avoid Auto Accidents
 
Time to complete:  A few minutes to read these tips
Money you'll spend:  $0
What you'll get:  A safe life.
How to avoid car accidents: 

  1. Avoid Distractions.  About half of all auto accidents are caused by distracted drivers.  If you take your eyes off the road for 2 seconds to switch a radio frequency, they could be the last seconds of your life.  Loud music, rowdy children and cell phones are all distractions that are known to cause accidents.  Before using a cell phone or any other distracting object, first pull over to the side of the road.  You may think you won't be distracted for more than a second, but sometimes the mind can play tricks on you.

  2. Don't Drink and Drive.  40% of auto accidents are caused by drunk drivers: about 15% of habitual drunk drivers are eventually killed in fatal accidents, and they usually take somebody else with them.  If you drive with just 2 beers in your belly, you may not feel impaired but you really are.  Don't let alcohol lie to you and take your life away.

  3. Drive Defensively.  The single best thing you can do is keep a good long distance from other cars, because that gives you a safety margin.  Also try to know what other cars around you are doing.  At all times appreciate the value of life.

  4. Be Extra-Careful at Night.  Most drunks come out at night.  Try to stay even further away from other cars.  Keep your windshield and wipers clean to minimize headlight glare.

  5. Be prepared.  Always wear your safety belt: it decreases your chance of death or serious injury by about 50%.  Keep a "safety kit" with all the supplies you may need in case your car should break down on the road.  This auto kit lists everything: you can either stock your car yourself, or buy a kit for about $50.  Keep your gas tank at least 1/4 full, especially in winter.  It's also a good idea to keep a spare tire, fan belt and jumper cables on hand, as well as a jack and a lug wrench.
Further Reading:


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  9. How To Avoid Auto Theft
I heard an amazing statistic the other day: 35,000 cars are stolen every year in my home state of Washington.  Over the 50 years that I'll be driving cars, that projects to 1.75 million stolen cars.  There are 5.6 million cars registered in Washington.  So there's about a 30% chance that I'll have a car stolen in my lifetime!  Car theft is a problem everywhere, and the situation is especially bad near urban areas.

To make sure it doesn't happen to you, consider buying the AutoLock or the Barricade, two effective and inexpensive anti-theft devices.  The Barricade (which is a steering-wheel lock that functions much like "The Club" except it's even stronger) is good enough for most cars.  Most thieves see it, and they pass on to the next car.  I have seen it for sale for about $35, but if your car is really new or valuable then you should spend the extra $20 and get the solid-steel AutoLock, because it locks onto the steel brake, making it almost impossible to cut.  The Barricade is also made of steel, but an expert thief only needs to take 5 seconds to cut through the steering wheel and slip off the Barricade, and your car is gone.  Most thieves won't go to all that trouble to steal an ordinary car, but they might do it if they can steal a Jaguar or a Lexus.  I don't recommend car alarms because they all have bypass codes that allow the more sophisticated thieves to breeze right past them.  Car alarms are useful mainly for people who take valuable items along with them in their car.

Having one of these security devices will almost certainly get you a discount on your auto theft insurance, so they really pay for themselves.  After you buy the anti-theft device, be sure to call you insurance company to ask for the discount.

     
 
 
How To Avoid Auto Theft
 
Time to complete:  A few minutes to read these tips
Money you'll spend:  $0
What you'll get:  Avoid car theft, it's all too common.
How to prevent car theft: 

  1. Install some sort of anti-theft device in your car and always use it.
  2. Always park in a lighted, high-traffic area.
  3. Keep your car locked and its windows closed.
  4. Don't stop for strangers when you're in or near your car (if you think someone needs help, call the police and let them do it.)
  5. Keep anything that's valuable hidden from view.
Further Reading:


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