A car is seen as a basic asset for the average American. You need a vehicle to commute to work, run errands, travel and more. You rely on it in your day-to-day life, which is why it’s unfortunate to find out that owning a car is getting more expensive.
Find out how car ownership is more expensive and what you can do about it.
Purchasing a Vehicle
Since the 2020 pandemic, new car prices have skyrocketed. This is partially due to supply chain disruptions caused by labor shortages and COVID-19 mandates. New vehicles and new vehicle parts couldn’t be shipped from international partners, leaving the country with a limited supply of vehicles and a lot of demand. To compensate for the lack of supplies, prices for cars on the lot rose dramatically. This year, the average new vehicle price was over $47,000.
What about used car prices? The increased demand for vehicles also pushed used vehicle prices to historical highs after 2020. However, used vehicle prices have begun to trend downward, making them a more budget-friendly option for prospective buyers.
If you need to buy a vehicle, consider purchasing a used vehicle in good condition. If you can wait a few months for this purchase, as the prices trend further downward, that will be even better for your budget.
Repairing a Vehicle
Supply chain disruptions have made it difficult to source certain car parts for repairs and replacements. With such a serious inventory shortage, the prices for parts have gone up. When the prices for car parts go up, the prices for repair services follow suit.
What can you do to prepare for repair costs? First, take a look at your auto insurance policy to see what it covers. You can be sure that in certain circumstances (like collisions), your insurance provider will help you handle the costs of repairs — althoughit may not help with the entirety of the costs.
Second, start building an emergency fund. An emergency fund is a stash of savings that you can use when you’re dealing with an urgent, unplanned expense. You can use it to cover the immediate costs of repairs. An emergency fund is a useful safety net to have for all sorts of small emergencies, from late-night plumbing repairs to last-minute dental appointments.
What if you don’t have enough in your emergency fund? Then, you could look into same business day loans online as an alternative solution. As long as you meet the requirements, you can fill out your application for the loan and wait for a response on your approval status. If your loan gets approved, you can use the borrowed funds to cover the repair costs quickly. After that, you can focus on a steady repayment plan.
Fueling a Vehicle
Filling up your car’s tank at the gas station might give you a shock. Fuel prices are hitting record highs this year. As of June 2022, the average gas price in the country was $5 a gallon. These steep prices have been blamed on various global issues, from pandemic recovery to the war in Ukraine.
How can you save money on gas? These are some things that you can try:
- Minimize trips with your vehicle.
- Don’t idle your car.
- Drive the speed limit.
- Use apps like GasBuddy to find cheaper gas prices.
- If you’re purchasing a new vehicle soon, choose a fuel-efficient model.
You’re not going to give up on car ownership, so prepare your finances for these expenses.