28 Tips to Save Money on Car Expenses and Save Thousands of Dollars

There Are Many Ways to Save on Car Costs

Do you own a car? You probably do, and that means you probably know how expensive it can be. Did you know that the average person will spend over $500,000 on vehicles and vehicle-related expenses over their lifetime. It really starts to add up. Vehicles don’t last forever so you need to replace them over time, you need to put gas in them, and then you have to think about insurance and maintenance–and that’s just in today’s dollars, not adjusted for inflation. Half a million dollars just to drive a car. When you think about it, that is kind of absurd when the average retirement account balance for most baby boomers these days is under $50,000. No wonder our cars are making us poor. How wealthy would we all be if we took the money spent on owning a car into an investment account?

Unfortunately, cars are a necessity for most of us. Without an extensive public transportation system we rely on buying our own cars so we can get around. It’s one of those things that we can’t escape. But just because it’s a necessary expense that doesn’t mean there aren’t ways to save on your car expenses. In fact, if you’re good you can literally save hundreds or thousands of dollars each year on your vehicle expenses. Save $1,500 a year for the next 40 years and that puts $60,000 in your pocket. Then if you use that savings wisely you’ll be living comfortably in your later years. Here are 28 tips that can help you save money on your car expenses.

How to Save Money on New Car Purchases

  • Keep your car longer instead of trading in or upgrading every couple of years. Not only does the cost of new cars rise each year, but cars depreciate quickly, and when you trade frequently, you lose money on low trade-in values. And don’t forget about interest if you have to finance part of the purchase. Buy a good quality car and keep it for at least five to seven years. Potential Money Savings: $400-1,000/year.
  • When buying a new car, consider the smallest model for your needs. Smaller cars are often cheaper, and because they’re lighter, they usually get better gasoline mileage. In addition, insurance tends to be cheaper on most cars compared to a large SUV. Potential Money Savings: $400-600/year.
  • When buying a new car, consider the impact that various options have on fuel economy. For example, you sacrifice a few miles per gallon when using air conditioning on the highway and even more in stop-and-go traffic; automatic transmissions get about five miles per gallon less than manual transmissions; and six-cylinder engines get about four to five mpg less than four-cylinder engines. Potential Money Savings: $400/yr or more by choosing the right options.
  • Don’t buy credit life or credit disability insurance through your car dealer when purchasing a new car. Some dealers do a hard sell on these coverages, but they are highly overpriced, and if they’re folded into your car loan you not only end up paying 100% to 500% more than you should for the coverage, you also pay interest on it. Stick to regular life and disability insurance through your employer or an individual policy. Potential Money Savings: $300-500.
  • Be extremely wary of purchasing service contracts or extended warranties on new automobiles through your dealer. Many of them have very limited coverage (in spite of what the salesman may lead you to believe) and they cost much more than policies purchased directly from providers. Make sure you understand what your current warranty covers so you’re not just throwing money away. Potential Money Savings: $500-1,000.

How to Save Money on Maintenance

  • Keep your car properly tuned. A poorly tuned car uses between 25% and 33% more gasoline each year. It’s also cheaper to pay the cost of a tune-up than it is to repair a major problem. Potential Money Savings: $50-100/year.
  • Change the oil and oil filter in your car according to your owner’s manual. A 3,000 mile oil change may not be necessary since many cars are now built to go much longer between oil changes. Potential Money Savings: $50-100/year.
  • Check your car’s air filter monthly. A dirty filter drags on engine efficiency and reduces gasoline mileage up to 10%. You can clean the filter by removing it and blowing it with an air hose, or you can replace it. Potential Money Savings: $130/year or more.
  • Use the proper tires for your vehicle. Having extra wide, large, or performance tires may drag on your gas mileage.  Potential Money Savings: $100/year or more.
  • Unless your manual suggests it, don’t waste money on premium gasoline. For most cars, premium gasoline offers no benefit. Unless your car has a high-performance engine and your manufacturer recommends a high-octane gas, use the less expensive gas. Premium gas costs 10% to 15% higher than regular. Potential Money Savings: $200-400/year.
  • Check your tire pressure regularly. You can improve your gas mileage by around 3.3 percent by keeping your tires inflated to the proper pressure. Under-inflated tires can lower gas mileage by 0.3 percent for every 1 psi drop in pressure of all four tires. Properly inflated tires are safer and last longer.. Potential Money Savings: $100-250/year.
  • Add thousands of miles to the life of your tires by having them balanced and rotated once a year. In addition to destroying the tread, improperly balanced tires can wear out your shock absorbers and damage your suspension system, leading to more expensive repairs. Potential Money Savings: $125-200/year.
  • Check fluid levels regularly. Make sure your power steering and radiator fluids are at proper levels with each oil change. Also check automatic transmission fluid, brake and clutch fluids. A bottle of fluid costs just a couple of dollars. Replacing a broken or worn part due to low fluids will cost you hundreds. Potential Money Savings: $50-300/year.

Save Money on Gas

  • Pump your own gas if you can. Self-serve gas is usually 5% to 10% cheaper than full service. Potential Money Savings: $50-100/year.
  • Combine errands when driving. If you plan your drive so that you hit all of your errands in one outing instead of making extra trips you’ll save on gas. If you save just 10 miles a week that’s over 500 miles each year. Potential Money Savings: $25-75/yr.
  • Purchase your gas with a cash-back rewards credit card. You can likely save up to 3% on all future gas purchases. Potential Money Savings: $50-100/year.

Save Money on Insurance

  • Ask your insurance agent how much money you can save by raising the deductible on your auto collision insurance. Often, raising the deductible from $250 to $500 can save you 10% to 30%. Increase it from $500 to $1,000 and save even more. If you have a good driving record, you could come out ahead. Potential Money Savings: $50-225/year.
  • Make sure you notify your insurance company of all the safety features that qualify you for discounts on auto or homeowner’s insurance, such as automatic seat belts or air bags in your car, smoke detectors in your home, etc. Non-smokers or non-drinkers can often get additional discounts and it requires little more than letting your insurer know. Potential Money Savings: $50/year.
  • If you drive an older car, consider dropping collision and comprehensive coverage (but don’t drop liability coverage). Collision coverage is required if you have a car loan, but for older cars that you own free and clear, weigh the car’s book value (what the insurance company would pay you if the car was totaled) against your collision premiums. If your car is over five years old or is worth less than just a couple thousand, keeping collision and comprehensive coverage may not be worth what you’re paying in insurance premiums. Potential Money Savings: $100-300/year.
  • Before buying a new car, ask your insurance agent whether the model you are considering will require a surcharge due to higher theft, damage or repair costs. Certain vehicle makes and models do carry higher premium.  Potential Money Savings: $50-200/year.
  • Shop around for insurance. If you’re getting good service from your company and are happy with the rates, you may want to stay with them, especially if you have had accidents or tickets. But if your record is good, shop around to see how much you can save, then decide if the savings are worth the switch. Potential Money Savings: $50-200/year.
  • Consider combining your auto and homeowner’s insurance under one policy. Many insurers give a 5-10% discount for having multiple policies. Potential Money Savings: $50-200/year.
  • If you have a high school or college student under 25-years old in your household, ask about the good student discount for auto insurance. If your student qualifies, you could save up to 25%. Potential Money Savings: $100/year or more.
  • This is common sense, but avoid tickets for speeding or moving violations. Many insurance companies give a discount of up to 20% if you have not had an accident or ticket for three years or more. Potential Money Savings: $100/year or more.

Save Money While Driving

  • Car pool to work if you can. By sharing the drive with just one other person, you could save an average of $20/month or $200/year in gasoline alone, if your commute is 20 miles round-trip each day. Sharing the driving with two others increases your savings even more. Savings vary depending on the length of your commute and the current price of gas. In addition to savings on gasoline, you’ll save maintenance costs and wear and tear on your car. Potential Money Savings: $400-700/year.
  • Another benefit to car pooling is that it reduces the annual mileage on your car. Since this reduces the risk of accident, your insurance company may charge you less for your coverage. Potential Money Savings: $25-50/year.
  • Wasteful driving habits can double your fuel consumption. Develop gas-saving habits, such as: (1) always accelerate gently (2) watch traffic ahead of you so you can anticipate slow-downs and avoid stops (3)coast up to traffic jams by lifting your foot off the gas pedal instead of approaching at full speed and slamming on the brakes. It takes 20% more gas to accelerate to normal speed from a full stop than it does from four or five miles per hour (4) don’t drive too fast or too slow. It takes 20% to 30% more gas to drive at 70 mph than 50 mph (5) maintain a steady speed on the highway by using the cruise control. Avoid getting stuck behind slow cars where you have to slow down to their pace and then speed up to pass. Potential Money Savings: $200/year or more.
  • Don’t warm your car up by letting it idle for lengthy periods of time. Modern car engines are running efficiently just seconds after ignition so a long warm-up time is not necessary. And idling wastes about a quart of gas every 15 minutes. Potential Money Savings: $20/year.

Hopefully you’ll be able to use some of these tips to keep your car expenses to a minimum. Saving $20 here and $50 there really does add up. There are probably other tips out there, so what have you found works best for you when it comes to saving money?

Author: Jeremy Vohwinkle

My name is Jeremy Vohwinkle, and I’ve spent a number of years working in the finance industry providing financial advice to regular investors and those participating in employer-sponsored retirement plans.

auto lubricant Mt. Laurel
auto lubricant Mt. Laurel

The tips given in this post are very helpful, especially to those who want to save money from repair costs but still want to maintain the good running condition of their vehicles. Before problems get worse for your cars, ti would be best to regularly check on them to identify problems before they get worse. Thank your for sharing such an informative post!


by becoming your own bank you can have another option when buying a car. Cash, finance, or become the bank. definitely something to look into.


Great and comprehensive tips. Just like other saving tips, these can really help us save dollars - if we will follow them and stick to those guidelines. If we want to remain effectively frugal, we should avoid being attracted to luxurious living.

The Biz of Life
The Biz of Life

A car is just something to get from point A to B. Forget the Mercedes and BMW and think Honda Civic. But change the oil religiously and you'll get at least 150K miles out of today's cars. Skip the warranty on new cars, but buy it on used cars.

Credit Girl
Credit Girl

Great tips! I wish I would've read this before I purchased a warranty on my new car. It's been 3 years and my car hasn't broken down yet so there goes my warranty...

Also, I still warm up my car for about a minute every morning just to make sure it'll have time to get things flowing.

Jamel Rose
Jamel Rose

Maintaining a car can become a very expensive duty, both in the short and long run. With inflation and gas prices skyrocketing, it becomes harder to make ends meet, and has many of us wondering where all our money is being spent.

The first step is to save money on the purchase or lease price of your vehicle. Since buying and leasing prices vary greatly from one dealer to another, it's critical to shop around and find the best deal. Compare (for an equivalent car), find the best basic rate, and try to land a special package or deal if you can.

The Rat
The Rat

Great post with lots of detail! Keep up the good work1

The Rat


I'm with you, Anthony. Vehicles really do last a long time and most people could get away with keeping their car 10-15 years. It's just that most people don't even keep their car long enough to get the loan paid off and end up in an endless cycle of trading in, losing money, and financing again. So at the very least, you should keep your car at least 5 years assuming you took out a 60-month loan so that you actually have something of value when it comes time to trade in. Even then, I think five year loans are too long.

Our vehicles are 8 and 5 years old and I they will keep on going for many more I'm sure. They might not be the prettiest cars on the road, but at least I'm not throwing hundreds of dollars away each month.

Tim Landry
Tim Landry

Frankly, if you live in a large city with a decent public transportation system, and do not need you car FOR work (Driving to and from does not count if the public transit system is decent) then why use your car? I live in Montreal and have never had a driver's licence. For $70/mth I can get anywhere on the island of Montreal by bus/metro almost as quickly as I could by car - and sometimes even faster if I do not need to go too far from the subway. Also I do not get tempted by the following. A broker I know lives and works on Nun's Island (suburb of Montreal). She lives 900 METERS from work. She got up one morning - looked out - saw a LOT of trafiic but "I NEED MY CAR" - so she drove to work - I repeat she drove 900 METERS. It took her TWO HOURS! I am sorry - walking would have been healthier AND FASTER. She could even have walked home to get her car - it still would have taken less than TWO HOURS. I am sorry - but we do not NEED our cars as much as we think


I can generally agree with all of your comments. In regards to your first bullet though, there is no reason why a new car shouldn't last 12-15 years, which is double what you suggested. At 12k-15k miles a year for 12-15 years, a car will have 200,000 miles on it. That is when I plan on buying a new car to replace my current one.


Maybe using the word "several" instead of "few" when talking about using the AC was the wrong choice. But even if your car is efficient enough to only lose 5% mpg by using the AC, if you get 30 mpg that's a 1.5 mpg loss. According to fueleconomy.gov using the AC on max will cost you anywhere between 5-25%. I'm not arguing that at higher speeds having the windows down is worse. I've seen Mythbusters, too. I'm just pointing out that using the AC can in fact cost you a few mpg.


"When buying a new car, consider the impact that various options have on fuel economy. For example, you sacrifice a few miles per gallon when using air conditioning on the highway and even more in stop-and-go traffic; automatic transmissions get about five miles per gallon less than manual transmissions; and six-cylinder engines get about four to five mpg less than four-cylinder engines. Potential Money Savings: $400/yr or more by choosing the right options."

Wow. Next time please ask someone with an automotive background before using your economics degree to offer technical advice. Yes, options can and do affect fuel economy, but in buying a new car today, these examples are generally incorrect.
A/C drops your fuel economy about 5% on most vehicles - generally not several mpg. Over 45mph, having your windows down will actually introduce greater losses due to airflow than will the parasitic power loss of A/C.
New automatic transmissions (especially if you have a dual-clutch version) often match or exceed the fuel economy of a standard manual. Even if it's an old-style auto, it's usually no more than a 2mpg drop.
As a general statement, 6 cylinder engines will be less economical than 4 cylinder alternatives in the same model car. Across models and especially brands, however, this isn't a statistically sound conclusion.