Ten Tips to Lower Driving Expenses
It's getting more expensive to own a car, and spiking oil costs are the primary culprit. Besides downsizing and driving less, there are ways drivers can ease the pain.
by JOHN ADAMS, ForbesAutos.com
Study Depreciation Rates
A vehicle's depreciation rate can be a better indication of long-term value than its sticker price. "What you pay for a vehicle doesn't matter. It's how much the car depreciates," says Michael Calkins, manager of approved auto repair for AAA in Heathrow, Fl.
Spending more upfront for a vehicle that holds its value better can save you money when it comes time to sell. Check Consumer Reports for depreciation ratings. BankRate.com is another resource for this topic.
Use Regular Gasoline
"A lot of cars recommend premium fuel but run fine on regular," AAA's Calkins says. But be warned: Using regular gasoline instead of the recommended premium could rob the engine of some performance."
If you don't need maximum performance, go down one or two grades in fuel," he says. "If the car runs fine, it's a good way to save 10 cents to 20 cents per gallon."
Optimize Insurance Coverage
"Do you have the right insurance for your life situation? You don't need collision coverage for a 15-year old vehicle," Calkins says. "And you might also be able to raise the deductible of some coverage to reduce costs."
Check Interest Rates
"Rates are low right now, so if you can come down a point or two and have three or four years left on your loan, it might make sense to refinance," Calkins says. Car loans don't have all the set-up costs of a home loan, so any rate drop you can get is worth going for."
Check with your bank, credit union or other financial services provider about refinancing your auto loan at a lower interest rate. Online resources like LendingTree.com could also prove helpful.
Specific Vehicles for Specific Tasks
Households with multiple vehicles can cut costs by using the smallest, most fuel-efficient vehicle whenever possible, such as when one or two people are running an errand or commuting to work. "If you're taking a discretionary trip, take the car that gets the best mileage if you can," says Steve Polzine, a director and analyst at the Center for Urban Transportation Research in Tampa, Fla.
Save the larger car, van, SUV or truck for when they're really needed, like when carrying many occupants and towing or hauling heavy loads.
Shop for the Best Maintenance Rates
"Don't over-maintain. You don't have to change your wiper blades if they're still successfully clearing the window."
A new website called RepairPal.com can help drivers assess maintenance and repair expenses.
Lengthen the Time Between Oil Changes
Ford, General Motors and Toyota have all suggested lengthening the mileage between oil changes on their vehicles from the traditional 3,000 miles to about 7,500 miles. This is partly because today's engines are more robust and have tighter tolerances than those of the past.
Most new vehicles now offer automated systems that alert drivers when it's time to change the oil, rather than forcing drivers to manually count mileage between oil changes, which typically cost about $50 per change.
Car Pool or Use Mass Transit
Car pooling is as old as cars themselves, but it's worth remembering that there's economy of scale in sharing rides to work, school and Little League. And most cities have some form of mass transit that might not be an all-out substitute for a private vehicle but could be used for some routine trips.
"All of those things can add up over time," Polzine says.
Downsize
By going down a bit in size, it's possible to own a less expensive vehicle without giving up a lot of space. AAA found that consumers can save a great deal by going for a smaller vehicle: The ownership cost for the average small sedan is $6,320 per year, but for a larger sedan, the cost jumps to $9,769.
AAA compared minivans and SUVs separately and found that consumers can save almost $2,000 per year by driving a minivan instead of an SUV.
Change Driving Habits
AAA's Calkins says that by anticipating stops it's possible to brake slowly, which reduces wear and tear on braking components and can help brake shoes and fluid last longer.
"Also, let the car coast as much as possible," he says. That and accelerating smoothly rather than abruptly can reduce fuel consumption, prolong brake life and reduce stress on other components like the transmission.
by JOHN ADAMS, ForbesAutos.com
Study Depreciation Rates
A vehicle's depreciation rate can be a better indication of long-term value than its sticker price. "What you pay for a vehicle doesn't matter. It's how much the car depreciates," says Michael Calkins, manager of approved auto repair for AAA in Heathrow, Fl.
Spending more upfront for a vehicle that holds its value better can save you money when it comes time to sell. Check Consumer Reports for depreciation ratings. BankRate.com is another resource for this topic.
Use Regular Gasoline
"A lot of cars recommend premium fuel but run fine on regular," AAA's Calkins says. But be warned: Using regular gasoline instead of the recommended premium could rob the engine of some performance."
If you don't need maximum performance, go down one or two grades in fuel," he says. "If the car runs fine, it's a good way to save 10 cents to 20 cents per gallon."
Optimize Insurance Coverage
"Do you have the right insurance for your life situation? You don't need collision coverage for a 15-year old vehicle," Calkins says. "And you might also be able to raise the deductible of some coverage to reduce costs."
Check Interest Rates
"Rates are low right now, so if you can come down a point or two and have three or four years left on your loan, it might make sense to refinance," Calkins says. Car loans don't have all the set-up costs of a home loan, so any rate drop you can get is worth going for."
Check with your bank, credit union or other financial services provider about refinancing your auto loan at a lower interest rate. Online resources like LendingTree.com could also prove helpful.
Specific Vehicles for Specific Tasks
Households with multiple vehicles can cut costs by using the smallest, most fuel-efficient vehicle whenever possible, such as when one or two people are running an errand or commuting to work. "If you're taking a discretionary trip, take the car that gets the best mileage if you can," says Steve Polzine, a director and analyst at the Center for Urban Transportation Research in Tampa, Fla.
Save the larger car, van, SUV or truck for when they're really needed, like when carrying many occupants and towing or hauling heavy loads.
Shop for the Best Maintenance Rates
"Don't over-maintain. You don't have to change your wiper blades if they're still successfully clearing the window."
A new website called RepairPal.com can help drivers assess maintenance and repair expenses.
Lengthen the Time Between Oil Changes
Ford, General Motors and Toyota have all suggested lengthening the mileage between oil changes on their vehicles from the traditional 3,000 miles to about 7,500 miles. This is partly because today's engines are more robust and have tighter tolerances than those of the past.
Most new vehicles now offer automated systems that alert drivers when it's time to change the oil, rather than forcing drivers to manually count mileage between oil changes, which typically cost about $50 per change.
Car Pool or Use Mass Transit
Car pooling is as old as cars themselves, but it's worth remembering that there's economy of scale in sharing rides to work, school and Little League. And most cities have some form of mass transit that might not be an all-out substitute for a private vehicle but could be used for some routine trips.
"All of those things can add up over time," Polzine says.
Downsize
By going down a bit in size, it's possible to own a less expensive vehicle without giving up a lot of space. AAA found that consumers can save a great deal by going for a smaller vehicle: The ownership cost for the average small sedan is $6,320 per year, but for a larger sedan, the cost jumps to $9,769.
AAA compared minivans and SUVs separately and found that consumers can save almost $2,000 per year by driving a minivan instead of an SUV.
Change Driving Habits
AAA's Calkins says that by anticipating stops it's possible to brake slowly, which reduces wear and tear on braking components and can help brake shoes and fluid last longer.
"Also, let the car coast as much as possible," he says. That and accelerating smoothly rather than abruptly can reduce fuel consumption, prolong brake life and reduce stress on other components like the transmission.
Nissan, Ford, Chrysler lead U.S. industry to 20% April gain
DETROIT -- Nissan Motor Co., Ford Motor Co., and Chrysler Group led the U.S. industry to a 20 percent sales gain in April as demand continued to recover from last year's collapse.
Overall sales rose to 982,302 from 819,692 a year earlier. The seasonally adjusted annual sales rate was 11.5 million, the second strongest of the year behind March's 11.7 million.
Ford said its retail sales rose 32 percent en route to a 25 percent overall gain, its fifth straight month of 20 percent or more. Toyota climbed sharply for the second straight month, again aided by no-interest loans and discount leases aimed at combating its recall crisis. Chrysler's 25 percent jump marked its first double-digit increase in almost five years. Nissan Motor was up 35 percent, and the Hyundai Group advanced 24 percent.
"We are putting the fundamentals together for a full-blown recovery," TrueCar.com analyst Jesse Toprak said, adding that April sales showed another month in a gradual return in consumer demand that was demolished in the past two years.
"It's slow, but we are on the right track," he said.
Today's results lifted year-to-date sales 17 percent above those of early 2009, when automakers battled the weakest demand in almost 30 years. General Motors Co.'s four surviving brands -- Chevrolet, GMC, Buick and Cadillac - recorded a combined increase of 20 percent. Overall sales for the automaker were up 7 percent.
Among smaller automakers, Subaru racked up a 48 percent gain in April and Volkswagen of America boosted its sales 39 percent. At the other end of the spectrum, American Suzuki's April sales fell 23 percent and Porsche lost 6 percent.
GM, Ford, Chrysler
GM has predicted U.S. sales this year will total 11.3 million to 11.8 million light vehicles. Although GM economist Ted Chu said he thinks the second quarter will continue its current pace, he predicted a one-million-unit increase in second-half sales compared with the first six months.
"Pent-up demand is building," Chu said. GM is winding down Hummer, Pontiac and Saturn and has sold Saab.
GM sold 9,150 Chevrolet Camaros, with about 7,800 of them going to individual customers. That's the highest retail total for the sports car since GM relaunched it in March 2009, said Steve Carlisle, vice president of U.S. sales operations.
Sales of the Chevrolet Silverado rose 12 percent, and the pickup saw its second consecutive monthly increase in sales to individual customers, Carlisle said. Its GMC Sierra sibling saw deliveries increase 13 percent, with a 19 percent increase in retail sales.
Ford's increase will be "good enough to gain market share," said Efraim Levy, a Standard and Poor's analyst, in a research not. "We like the mix improvement, with retail sales, pickups and utilities powering the volume forward. Residuals values reportedly advanced for Ford, outpacing the industry."
Ford was led by a jump of more than 42 percent in F-Series pickup trucks and a 41 percent rise in its Escape SUV. The automaker said fleet demand rose 13 percent, well below the 32 percent gain in retail sales.
Chrysler's 25 percent advance was the biggest since a 27 percent in July 2005, when U.S. automakers offered all buyers the same discounts as employees.
The average estimate for an industry sales pace of 11.4 million vehicles would compare with the 9.5 million of a year earlier, after the industry experienced the lowest U.S. demand in almost 30 years.
Consumer Confidence
Automakers were buoyed by consumer confidence that rose in April to its highest since September 2008, as measured by the Conference Board's monthly index.
Toyota began offering incentives on March 2 such as subsidized leases after worldwide recalls of more than 8 million vehicles to fix defects linked to unintended acceleration and to adjust brakes. The company probably spent an average $2,416 on incentives on each vehicle last month, according to TrueCar.com.
The industry average is about $2,798, TrueCar.com said. Incentives are down 4 percent from March 2009, when GM and Chrysler boosted spending ahead of their bankruptcy filings.
John McEleney who has a Toyota and a Buick, GMC and Cadillac dealership in Clinton, Iowa, said sales were up 30 percent at his Toyota store and increased about 20 percent among his GM brands.
"Sales were really pretty good, but not quite as good as March," McEleney said before today's results were released, adding that sales may keep gaining this year. "We're seeing a lot more showroom traffic and a lot more Internet activity. People are feeling better about their jobs, too."
Overall sales rose to 982,302 from 819,692 a year earlier. The seasonally adjusted annual sales rate was 11.5 million, the second strongest of the year behind March's 11.7 million.
Ford said its retail sales rose 32 percent en route to a 25 percent overall gain, its fifth straight month of 20 percent or more. Toyota climbed sharply for the second straight month, again aided by no-interest loans and discount leases aimed at combating its recall crisis. Chrysler's 25 percent jump marked its first double-digit increase in almost five years. Nissan Motor was up 35 percent, and the Hyundai Group advanced 24 percent.
"We are putting the fundamentals together for a full-blown recovery," TrueCar.com analyst Jesse Toprak said, adding that April sales showed another month in a gradual return in consumer demand that was demolished in the past two years.
"It's slow, but we are on the right track," he said.
Today's results lifted year-to-date sales 17 percent above those of early 2009, when automakers battled the weakest demand in almost 30 years. General Motors Co.'s four surviving brands -- Chevrolet, GMC, Buick and Cadillac - recorded a combined increase of 20 percent. Overall sales for the automaker were up 7 percent.
Among smaller automakers, Subaru racked up a 48 percent gain in April and Volkswagen of America boosted its sales 39 percent. At the other end of the spectrum, American Suzuki's April sales fell 23 percent and Porsche lost 6 percent.
GM, Ford, Chrysler
GM has predicted U.S. sales this year will total 11.3 million to 11.8 million light vehicles. Although GM economist Ted Chu said he thinks the second quarter will continue its current pace, he predicted a one-million-unit increase in second-half sales compared with the first six months.
"Pent-up demand is building," Chu said. GM is winding down Hummer, Pontiac and Saturn and has sold Saab.
GM sold 9,150 Chevrolet Camaros, with about 7,800 of them going to individual customers. That's the highest retail total for the sports car since GM relaunched it in March 2009, said Steve Carlisle, vice president of U.S. sales operations.
Sales of the Chevrolet Silverado rose 12 percent, and the pickup saw its second consecutive monthly increase in sales to individual customers, Carlisle said. Its GMC Sierra sibling saw deliveries increase 13 percent, with a 19 percent increase in retail sales.
Ford's increase will be "good enough to gain market share," said Efraim Levy, a Standard and Poor's analyst, in a research not. "We like the mix improvement, with retail sales, pickups and utilities powering the volume forward. Residuals values reportedly advanced for Ford, outpacing the industry."
Ford was led by a jump of more than 42 percent in F-Series pickup trucks and a 41 percent rise in its Escape SUV. The automaker said fleet demand rose 13 percent, well below the 32 percent gain in retail sales.
Chrysler's 25 percent advance was the biggest since a 27 percent in July 2005, when U.S. automakers offered all buyers the same discounts as employees.
The average estimate for an industry sales pace of 11.4 million vehicles would compare with the 9.5 million of a year earlier, after the industry experienced the lowest U.S. demand in almost 30 years.
Consumer Confidence
Automakers were buoyed by consumer confidence that rose in April to its highest since September 2008, as measured by the Conference Board's monthly index.
Toyota began offering incentives on March 2 such as subsidized leases after worldwide recalls of more than 8 million vehicles to fix defects linked to unintended acceleration and to adjust brakes. The company probably spent an average $2,416 on incentives on each vehicle last month, according to TrueCar.com.
The industry average is about $2,798, TrueCar.com said. Incentives are down 4 percent from March 2009, when GM and Chrysler boosted spending ahead of their bankruptcy filings.
John McEleney who has a Toyota and a Buick, GMC and Cadillac dealership in Clinton, Iowa, said sales were up 30 percent at his Toyota store and increased about 20 percent among his GM brands.
"Sales were really pretty good, but not quite as good as March," McEleney said before today's results were released, adding that sales may keep gaining this year. "We're seeing a lot more showroom traffic and a lot more Internet activity. People are feeling better about their jobs, too."
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