10 Tips to Save Money on Your Car
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If you need a car where you live, you probably also want to save money on your expenses. Cars can be expensive. But there are many ways to make having a car cheaper.
Here are ten tips that will help you save money on your car expenses.
If you follow them all, you can keep your transportation budget lower than most people!
1. Buy a cheaper car
The best thing you can do to save money on your car is to buy a cheaper car. You have to think of how much time you spend in your car and how much you drive it around.
Most people are not spending that much time in their cars. Therefore, they can sacrifice comfort by not needing leather seats, state-of-the-art sound systems, cameras, and TVs.
Buying a cheaper car has several advantages:
- It is cheaper when you buy it.
- It is cheaper to insure it.
- It is sometimes cheaper to maintain.
- It is cheaper on taxes.
Now, this does not mean you should buy a crap car. If you buy a vehicle requiring too much maintenance, you will not make a good deal. You should still buy a good car.
Some expensive car brands will indeed require little maintenance and last longer. However, you will pay so much upfront that you will not be even. And even a great luxury car is not protected from destruction or a big problem.
For instance, I bought a Hyundai i20 ten years ago for 12’000 CHF. I bought it new and had very few issues with this car. It is quite cheap, and it saves me a lot of money!
2. Avoid leasing and loans
To save money on your car, you must avoid leasing and loans.
The only reason people like leasing so much is that they allow them to buy cars they cannot afford. If you cannot save money for a car, you cannot afford it! In Switzerland, most people lease their cars because they do not want to wait for the cash to buy them. And most people think they made a good deal.
I recommend paying for your car in full directly. Buying your car in cash is the best way to ensure you can afford this car. Only this is an excellent reason to buy rather than lease! If you purchase it in cash, you will likely buy a cheaper car than if you lease it.
Now, there are several other reasons not to lease it:
- It is more expensive than buying it.
- You do not own the car. You will still have to pay to own it at the end of the lease.
- You are forced to buy maximum insurance for the duration of the lease.
Some people could finance it instead of leasing it. But car loans are generally significantly higher than leasing. You could save some money on insurance. But you would lose it on the interest payments. So, financing makes even less sense than leasing.
So, you should wait until you can buy the car you want. And as we have seen on item 1, you should consider cheaper cars.
In general, you should never use loans to buy a depreciating asset. Nevertheless, the opportunity of buying a car in full may be important if you are investing aggressively. So, you may want to consider leasing if you are investing.
3. Buy a less powerful car
In Switzerland, you need to be careful about buying powerful cars. The first obvious reason is that a powerful engine will consume more gas.
But the second reason is less obvious: taxes and insurance! Indeed, in Switzerland, the circulation office will tax you based on the car’s power. If you have a massive engine, you will pay more taxes. It is also based on the vehicle’s value, but we have covered that already.
Also, having an extremely powerful car when you have slow limits on the road is not helpful. Many people do not use half of the power of their car!
So, to save money on your car every year, you should opt for a standard car, not a huge racing car or a pickup truck.
4. Do not over-insure your car
When you buy a new car, you want to have proper insurance for it. But to save money, you want to reduce the coverage over the years.
However, as the car loses value, you can reduce the insurance you need. If your vehicle is worth a few thousand Swiss francs, you do not want it covered for everything. In most cases, it will be better to scrap it instead of fixing it.
In Switzerland, there are several layers of insurance for cars:
- Civil Responsibility Insurance. This layer is mandatory for every car.
- Partial Casco Insurance. This second layer will cover some natural damage to your car.
- Full Collision Insurance. This insurance will cover all the damage from a collision with another car.
It is good to start with all the layers with a brand-new car. But once it gets old and loses value, you should reduce the coverage to save money.
There is no rule about which coverage you should have for which car. For me, I would not keep full collision insurance for more than five years on the cheap cars I buy. And I probably would not keep partial casco insurance for more than seven or eight years.
To learn more, read my article about car insurance.
5. Pay your car insurance annually
You must pay car insurance, but you could save money by paying it annually.
Most car insurance in Switzerland have options to pay it several times. Generally, you can pay it annually, quarterly, or bi-annually. But splitting it will cost you something.
So, it is always better to pay your car insurance once a year instead of several times. Of course, you must plan for it and ensure you have the cash to pay it. But it is not difficult to do and worth cutting your expenses down.
6. Find a good mechanic
Even if you are very careful with your car, you must maintain it regularly. And if something is broken, you will need to replace it.
There are some considerable differences in prices between different car mechanics. For instance, here are the costs for my three first car checkups:
- Hyundai car shop in a closeby village: 350 CHF
- Hyundai car shop on my way to work in a larger village: 650 CHF
- Our family car mechanic: 250 CHF
These are some significant differences for essentially the same service. So, yes, the bigger shop cleaned up the floors of our car. But this is not worth several 100s of CHF! I can clean my car myself.
Of course, be careful that you still need to find a good car mechanic, not only a cheap one. And you may have to try several of them until you find the right balance of expertise and price. But in the end, you can save a lot of money on your car expenses if you find a good car mechanic.
7. Find a cheap gas station
Most of the time, you will buy your gas at the same gas station.
So, it is essential to find a cheap gas station that is easily available to you. If you have the same commute every day, you can compare all the gas stations on your trip. And then, you can pick the one with the cheapest gas price.
There are some significant differences in gas prices between different gas stations in Switzerland. For instance, in my short commute, there is a 10-cent difference per liter for gas. The choice of this gas station makes a difference of almost 100 CHF per year. It is nearly 10 percent of our gas budget. And we are driving very little.
Of course, once you need gas, you should take the closest station. I am talking about regular trips to your work or clients.
For people driving their cars more than us, it makes a significant difference to choose the cheapest gas station available.
8. Take care of your car
It may sound obvious, but you should take care of your car.
I am not saying you should polish it every month and have it pristine and clean. But you should take care of it. If something is wrong, you should not wait too long to make it checked.
You should also wash it regularly to avoid permanent damage. And you should not delay checkups and maintenance. For instance, you could check the pressure in your tires from time to time. Making these checks early on will help save money in the long term.
9. Do some repairs yourself
There are also a few things that you can do yourself in the car to save money.
Of course, this will depend on how handy you are. Here are some car repairs that most people should be able to do:
- Change car tires.
- Change windshield wipers.
- Change the lights if broken.
- Change the air filters.
Maybe you will able to do more than that. But only these could help you save money on your car maintenance. But be careful about not making it worse. If you are not handy and knowledgeable, you should not change the brake pads yourself!
10. Drive economically
Finally, you can also save some money by driving more economically. You could save on gas.
The first thing you can do is to slow down. You spend less gas at 80 km/h than at 90 km/h. So, by keeping to the speed limit, you will save money and stay within the boundaries of the law.
If you have a manual car, you can save gas by changing gears earlier. Do not wait until your engine is at 3000 RPM to change gear, change it at 2000.
Another thing you can do is to avoid having useless things in your car. Do not keep things around. All the weight in your vehicle will make you consume more gas.
If you want more tips on saving gas, there are tons of articles like this one.
Conclusion
As you can see, there are many ways to save money on your car expenses. If careful, you can keep your car budget lower than most people think. I hope that these tips will help you save more!
Including parking but not depreciation, we are spending about 4500 CHF each year on transportation in our car. It is not negligible, but this is not that much, either. Our transportation budget is quite low in our budget. Most people I know spend significantly more than that on their transportation budget.
Some of you probably think that I should have mentioned not having a car as a way to save money. But I am talking about people that have to have a car. And I do not believe that cars are evil like many people. And I especially do not think that everybody should live in cities and use public transportation.
And finally, it is worth mentioning that you may not need a car full-time. If you use a car very rarely, you should consider something like Mobility. Indeed, Mobility can be cheaper than owning your car.
We have covered how to save money with your car in this article. Another way would be to use your car and make money with it. This may work well if you do not use your car much.
If you want to learn more about how we are going around, I have an article about our means of transportation.
Do you have any other tips to save money on car expenses?
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Since I start the frugal lifestyle I’m exploring this site. Here are some takes on cars: Try to limit using it. Take a bike, walk etc. not only for gas but also repare costs etc. a car only loses worth with each km. Then, for gasprices I descovered the “tcs benzin” app, with actual reliable prices for gas stations. And consider coupons etc (Vereinskarte for Avia, Poinz App for BP, etc.). Also use credit cards with cashback if possible. Then, buy things used or online. You mentionned changing your own lightbulbs, not only the repair, but also the material itself is much cheaper than in a garage. Same for tires, windshields but also oil or batteries. If you cannot fix it yourself, you can stil bring the parts to the garagist and save on materials (worth compairing, asking for prices at the garage). Carflipping seems to be very interessting too, like buy a cheap car, make basic repairs and cleanings, then sell it with profit. As a car is a major spending in Switzerland I think it’s worth a look to be able to take good care of a car for yourself, for friends and family, or for profit. However I’m not a car guy and am only about to start with basics on my own car.
Hi Thomas,
Thanks for sharing your thoughts!
Yes, any limiting of the use of the car is ideal! We walk whenever we can to our village, for post office, chese, meat and bread. But anything else we often have to take the car. It’s probably the best way to spend less on your car. We drive very little (5-6K per year these days), so we keep our costs relatively low.
That’s a good point about buying parts yourself. But I am sure some mechanics will not agree. I never thought of that actually for things I could not install myself.
11. Register car on your wife’s name as insurance fees for females are (much) lower :) (today’s discovery)
Hi Alex,
That’s funny, I was thinking it was the contrary.
I just checked on compares and I would pay 100 CHF more per year if I registered it with my wife’s name, but the fact that she’s not Swiss may also play a role.
Looking on the internet, it seems true that women are paying less. That’s a cool tip! But you also have to make sure that you both start with the same bonus.
Thanks for sharing!
Nice article, although as car enthusiast myself, I will do differently, haha 😄.
By the way, someone mentioned electric vehicles, as Tesla owner, I think EVs might not be that economical, especially if you drive less than 20’000 km per year. The initial price gap may take more than 10 years to compensate. Let me explain.
Speaking of the initial price, an EV with good range needs at least 50kWh battery (less than 50kWh is usable, but only in city). It costs around 40’000 CHF, not cheap.
And EVs have some hidden cost that we need to consider.
1. Home charger. This is an expensive investment, it may cost you 1’500 CHF and don’t forget that you also need to rent an indoor parking place or garage.
2. If you install a high current home charger (more than 50Amp), you may also need to pay an additional flat tax every month in some regions.
3. Electricity is cheap, but the price is shown per kWh, and 1 kWh doesn’t have the same energy density as 1 litre of fuel. For highway driving, you may need to multiply the electricity price by 2.
4. If you want to use the public charging infrastructure, the price is not competitive. Some examples, (don’t forget x2 for highway driving)
– Tesla Supercharger (Tesla Only): 0.3 CHF per kWh
– EVPass: 0.5 CHF per kWh.
– Ionity: 0.79 Euro per kWh.
– Home Charger in Lausanne: around 0.22 CHF per kWh, if I remember correctly. (maybe still has a flat tax for hight power charger, not sure)
– Home Charger in Martigny: significantly cheaper, 0.15 CHF per kWh, no more additional tax in 2020, if I am not mistaken.
The most economical option is to buy a reliable and cheap Hybrid car with free service included. With Zurich Insurance, you can have a big eco cut for Hybrid and Electric vehicles.
Hi Cedric,
Thanks a lot for the detailed example with a Tesla. It is extremely interesting.
Are you happy with your Tesla?
I also came to the conclusion that for what we drive (about 8000km a year), an electric car is just too expensive. Hopefully, this will change by the time we change our car.
It’s also good that you mention eco cuts, I did not know about them :)
Thanks for stopping by!
Hello,
I have mixed feelings about Tesla. I may have set my expectation too high.
+ Quiet and confortable driving experience in city and highway.
+ Linear input for both acceleration and brake pedal, very easy to drive.
+ Amazing public charging infrastructure in Switzerland and EU. It’s the only EV that can do road trips.
+ No annual oil change.
– Not as economical as I initially thought. Owning an EV has hidden costs (mentioned in the original post).
– Bad visibility. The A pillars are too thick, be careful in city.
– Bad build quality.
– Fast depreciation.
– Terrible high beam headlights for a 45’000+ CHF car.
– Occasional software bugs. (Screen doesn’t turn on, screen freezes, update stuck, etc.)
– Autopilot (this is a marketing term, it is just a cooler Adaptive Cruise Control) works, but it may be less reliable than other manufacturers’ less cool Adaptive Cruise Control. The biggest problem is called “Phantom Braking”. It has already happened to me multiple times. While using Autopilot, the car brakes hard on highway without any obstacle in front of me. This is extremely dangerous and makes me not trust the system any more. This is my biggest complain.
– *Boring to drive on mountain and country roads (subjective, from a car enthusiast’s point of view).
Overall, I think it is good vehicle, but not for everyone, and don’t set the expectation too high.
Best.
Interesting article. I will also recommend to consider the electric car option with no gas cost and maintenance costs way lower, they are progressively becoming an interesting option financially speaking too.
Hi David,
This is a good point.
I was actually actively considering an electric car for ourselves for the next car. And then I discovered that you have to rent the battery. And from all the information we received, just the rent price of the battery would have been higher than the price of gas we spend every month.
This is pretty sad!
It seems you can also buy the battery but then the car gets much more expensive and it would take many many years to be profitable.
Hopefully, this will get better by the time we buy our next car. But for now, it does not seem very economical. There are obviously other advantages, but this post was about saving money ;)
Thanks for stopping by!
Only valid for Tesla cars ;-)
Do you mean that other electric cars have more maintenance costs? I am seriously asking because I do not know enough about electric cars.
It is disappointing that they end up being so expensive.
We live in Lausanne partly because of the convenient public transportation system, but it IS expensive. Now that we have a family, I think it’s better to live in a village and have a car. The 4500 chf you spend a year is very reasonable!
Hi Mama Bear,
If you live in the city and do not have a car, you can take down the costs depending on how far you are going by public transportation.
For us, it would be inconceivable to not have a car. For now, we are managing to keep only one car which is good. But maybe we will have to have two cars later on.
Thanks for stopping by!