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We have public transportation too.  Like everywhere else, there are trains, buses and metros.  It’s just that the routes cover so little of the area that it is impractical for most of us.  So over at this side of the pond, many of us are used to calling car expenses a necessity.

As a frugal minded person, there is no need to be upset because we cannot eliminate this expense.  We can still drastically reduce the money we spend on a car by making financially sound decisions.  Here are a few areas to look out for.

When to Replace Your Car
The easy answer is to drive the car until it no longer functions but for most of us, it’s impractical and unbearable.  Who wants to drive a car that is 30 years old and breaks every other day unless we are proficient in car repairs and can do it ourselves?

If you want to be practical about this, why not drive the car until the repairs are so frequent it starts to affect your daily lives?

Which Car to Buy
Who doesn’t want that Porsche?  If financial independence is your priority, then get a car that is affordable for your circumstances.  Forget about the exotic cars because all they do is give you temporary fame and not long term happiness.

Knowing Which Finance Option is Right for You
Many people want to know whether it is better to finance or lease a car.  While these options might be better for a few people, buying the car in cash is the most financially sound approach for most.  If you don’t think you can afford to pay it in cash, get a less expensive car!

Gas Mileage
The great thing about an inexpensive car is that it usually comes with better mileage per gallon of gas too.  Gas prices so high these days that this expense is really becoming a major portion of our monthly budget.  When you buy a car, look for cars that don’t require high octane gas because that adds another 5% to your overall cost to fill the car up.

Maintenance
Going to a dealership is great but all the same things can be done at a local car shop.  If you’d like to be safe, read through the owner’s manual and ask the local car shop to check on the specific things that the dealership maintenance schedule calls out for.  Beware though that you find a good local car shop as the wrong choice can turn out to be a very expensive and dangerous decision.

There are also places who will install parts for you if you buy them yourself, which is quite easy with the internet these days.  Remember that the more you can do yourself, the more you are saving!

Car Insurance
When purchasing a car, insurance premiums should be very high up on the list of items to check for.  As the monthly premiums aren’t necessarily proportional to the car price, we should make sure that the premiums don’t change the affordability equation.

Even with the same car, insurance premiums can be drastically reduced if we just take the time to shop around!  Calling several car insurance companies can yield different results and the best negotiation tactic is always to have a lower offer in your back pocket!  Another great way to lower your premiums is to specifically ask for discounts because many insurance salesmen don’t offer it up front!  This exercise doesn’t stop after you purchase your vehicle because regularly shopping around will give you insurance discounts that you didn’t think was possible!  Make sure to keep your rep honest about what he or she is quoting you!

Final Thoughts
With so many people mindlessly overspending on their cars, it’s so easy for us to cut back and make a huge positive difference in our financial situation!  Write down the points listed above and keep reminding yourself what can help you save money!