Be A Smart Car Owner

"Life is incomplete without a car in this country." While I agree with this statement to some extent, I also believe that making the choice intelligently and using your drive efficiently are two associated essential doctrines too.

I purchased my new car in March 2009 and am enjoying every bit of it. You should take great pride as owner of your valuable vehicle and should also bask in its impressive luxury, but the fact stays that you have put your hard-earned earnings into it and it still feeds on your bucks. Though my experience of owning a car is far too short at this time when I am writing this post, but I would like to share a few important areas that I found should never be overlooked.

• Know your needs, measure what you want!

NEEDS and WANTS have always been the keywords in the theories of budgeting, frugality, personal finance, etc. It is not always possible to stick with your NEEDS and one day or another you must give way to your WANTS - buying a car takes no exemption.

If I put in simple words,

"knowing what you need your car for and what kind of car you want will make a big difference in deciding other aspect of the purchase".

• Anticipate, Plan & Then Purchase

To some extent, these words form the very basis of every finance management. So you are planning to buy a car ... no different ... once you know what kind of car you need, approximate how much down payment are you willing to make. Start savings towards your goal from today by keeping aside an appropriate amount from your salary. This approach will keep the money flow in all areas you deem necessary while adding-up to your car purchase funds.

• Make intelligent choice

One of the important factors in your purchase is what kind of car you are buying itself. Some people usually keep planning to buy their dream car (JD's Minicooper ;) ) and some make the decision within few weeks or months.

Keep in mind:

1) Reliability - Is this model considered reliable in the market or people have varied experiences using it.

2) Efficiency - How efficient is this model in city and on highways. Where are you gonna drive it the most.

3) Maintenance (Brand?) - Do owners of this model keep visiting their dealer/mechanic.

4) Pre-Owned or New - Would you like to ride the fresh piece or take pleasure in savings some big bundles.

5) Big or Small - Will many ride in it most of the time or it will just you a few occasional guests.

6) Coupe or Sedan - Which one looks sporty/beautiful/attractive... to you.

7) Additional features(?) - List the add-ons.

8) Survey the market - Survey almost everything you consider important in your purchase including items 1 through 7. Search internet, talk to friends, relatives, colleagues, dealers, etc. You might want to visit Kelly Blue Book and Edmunds.

Said this much, I also believe that everyone has his/her desires too and those play a crucial role in the purchase; it's not rare, they are mostly beyond your influence.

• Haggle with your dealer (s)
  

I wrote an article sharing my experiences how haggling helped me save thousand of dollars. It works and it pays off, you don't really have to feel awkward when you negotiate price of a commodity with the shop owner. The rest of world does it and Americans must learn it too.

• Auto Insurance

Of all other aspects I am mentioning in this post, Auto Insurance is that one devil who will always be with you. Another reason one should be wary of insurances is that there are just too many factors which may affect your monthly premium.

To list a few:

1) Driving record - Follow traffic rules, drive safe, make harmless driving decisions. Cleaner your driving record, cheaper your premium.

2) Credit record - Higher your credit score, more trust-worthy and reliable you look. You get lower premiums.

3) Your Age & Driving Experience - More experienced you are, more you know about driving and lower are your premiums.

4) Anti-Theft & Safety Features - More safety and anti-theft equipments means lower premiums.

5) Safety of your parking area - Lower is the risk of vandalism, theft and disasters, lower is your premium.

6) Discounts - Alumni associations, employer groups, credit union memberships, Defensive Driving Course, item 4 above, low miles, longer relationship with insurer, other insurances from same insurer, (anything else? )

7) Higher deductibles - Higher the deductible, lower the insurer will have to pay. Lower your premiums.

• Buy Cheaper Gas
  

It may not always be a good idea to buy gas from your nearest gas station. Though the difference in gas prices from station-to-station isn't more than a few cents but it adds up over a long period of time.

I hardly drive 2-3 miles one-way daily on my way to work and some weekend roaming-arounds; that requires me to fill my tank mostly once a month. For me shopping for cheapest gas prices saves around $12-15 a year, well that may sound a meager saving but hey, that's almost my 2 months of my Netflix bill.

Coming back to gas prices, there are several websites that let you find cheapest gars prices around you.

To name a few:

1) Mapquest (suffices my quest :P)

2) FuelMeUp

3) GasBuddy

4) GasPriceWatch

5) MSN Auto
6) Know others?

Another factor in saving on gas is the day of your fill. Gas stations tend to hike prices on weekends; yeah it's a no-brainer, fill on a weekday and save.

• Controlled 'Cruise'

Before buying my car, I couldn't rent one high enough to have cruise control. Then when I got one for me, I was elated so much only at the thought that I won't have to worry anymore about whether my foot is pressing the pedal (accelerator) appropriately at all times. With time, listening to people, I came to know that cruise control helps you get better mileage. That's true as far as you are on fairly uniform terrain. Cruising on an undulated terrain requires your transmission system to change gears frequently resulting in lowered efficiency.

Last weekend I tried this on my 80 miles trip to Syracuse and drove 5 miles more per gallon :)

• Monitor Your Mileage

Keep track of how many miles your car runs before each refueling. If you feel lazy to do that, try fuelly.com. It's fun and already many are members of this community. You sign-up and punch in your car details every time you refuel and fuelly.com will keep a log of your mileages. You will also find some nice efficient driving tips, my favorites are:

1) Don't pedal while starting or reversing

2) Always look-ahead and start slowing down if you see a red-light (or any other obstruction) in front

3) Minimum possible acceleration & deceleration

4) Try to maintain uniform speed

5) Avoid using cruise control on undulated terrains

6) Keep your tires properly inflated at all times

• Car-Pool

Websites like Carpool Connect and eRideShare let you search for people around you who work or live in your vicinities. Car-pooling saves you on gas, miles, and you can have nice chat while your way to office and back home.

• Aware of FY 2009 new car purchase tax benefits?

As a result of efforts made by Maryland Senator Barbara Mikiulski, new car owners will get benefits in 2009 Tax Returns via the Auto Owner Tax Assistance Amendment. As per the amendment, any sales tax and any interest you paid on your car loan in the FY 2009 will be deducted from your FY 2009 taxable income, yes you read it right, you will be taxed on a reduced income.

There are certain stipulations though, tax benefit applies to:

1) new car purchases
2) between February 17, 2009 and December 31, 2009
3) purchase price less than $49,500
4) buyer's qualifying income $125,000 for individuals and $250,000 for couples

Note: This information is not exhaustive. Please confirm with appropriate legal docs.

I'd love to hear from you if you if leave out any other bullet and what you think of this post. :)

I'm in a Blog Carnival: This post was among the ones exhibited in Money Hacks Carnival at StretchyDollar. I am excited about your presence on my blog today and I would be glad to know about your thoughts on this post and my blog, hope to see you around :)