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7 proven ways to cut your car ownership costs — without sacrificing safety

Michael KurkoDecember 19, 2025 at 12:16 AM

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7 proven ways to cut your car ownership costs — without sacrificing safety (pixelfit via Getty Images)

For most people, owning a car is the second-biggest household expense after housing. And it’s only getting pricier: The average American spends more than $12,000 a year to keep their car on the road with monthly payments, insurance, fuel and unexpected repairs, according to AAA.

Here are seven practical ways to slash those costs without cutting corners on safety or reliability — and keep hundreds (or thousands) more in your wallet.

1. Think beyond the sticker price

Your biggest car-ownership savings happen before you buy. Instead of focusing on what you can afford each month, consider the total cost of ownership — depreciation, maintenance, fuel economy, insurance and resale value.

The numbers tell the story: New cars lose about 20% of their value in the first year and nearly 60% after five years, according to Carmax. A gently used car that’s three to five years old offers a sweet spot — you avoid the steepest depreciation while still getting modern safety features and convenience. Sites like Edmunds, Consumer Reports or CarEdge can show you the real five-year cost of ownership for just about any model, including hidden costs most buyers miss.

When you’re ready to buy, gather quotes from at least three dealers or online sellers. Skip pricey add-ons like fabric protection or VIN etching, and factor in local taxes and fees, which can add 10% or more to your purchase price.

A few hours of research can help you save hundreds or more before you even drive off the lot.

🔍 Read more: 7 dirty car dealership tricks that almost cost me thousands (and how to fight back)

2. Refinance or pay down your auto loan

Interest payments can inflate your cost of ownership by thousands. The average auto loan rate currently hovers around 6.80% for new cars and 11.54% for used cars, according to Experian. If your credit score has improved since you bought your car or interest rates have dropped, refinancing can lower your costs or shorten your term.

On a $20,000 loan at 8% over five years, reducing your rate to 6% saves you more than $1,130 in interest — and cuts your monthly payment by about $19.

If refinancing isn’t an option, making extra payments to your principal works too. Just $50 extra per month to that same $20,000 loan at 8% can save you some $930 in interest and shave seven months off your repayment timeline.

Once your car is paid off, keep the momentum going. Redirect what you were paying into a high-yield savings account earmarked for maintenance or your next car.

🔍 Read more: Should you refinance your auto loan? 6 times it could be a smart money move

3. Don’t auto-renew your car insurance

Car insurance is one of your easiest recurring costs to save on — if you’re willing to do some work. Bankrate reports the average insurance bill for most Americans at a whopping $2,671, but rates can vary by $1,000 or more depending on your insurer. And even ZIP code.

If you haven’t shopped around for a new policy recently, you could be paying a significant “loyalty tax” by staying with your current provider.

Set a calendar reminder to get new quotes at least a month before your current policy ends. Shopping early not only gives you time to compare offers thoroughly, but it’s likely to lead to lower rates. Insurers like Liberty Mutual and GEICO offer “early shopper” discounts to drivers who plan ahead.

And don’t stop at the base quote — ask about every possible discount:

Pay-in-full discounts. You can often get 5% or more off your policy if you pay at least six months of coverage up front.

Safe-driver programs. An online or in-person defensive driving course can save you up to 10% on your premium.

Low-mileage discounts. If you drive less than 7,500 miles a year, it could save you money off your quote.

Use-based insurance (UBI) discounts. UBI programs typically use a smartphone app, easy-install monitoring device or other telematics to track how much and how safely you drive. (Just understand how these telematics programs work to determine whether the discount’s worth it for you.)

Bundling discounts. Most insurers are willing to knock 5% to 25% off your premiums when you combine auto and homeowners insurance or property coverage.

Professional membership discounts. Belonging to a nonprofit, credit union, college or alumni association, social club or even wholesale shopping club might net you exclusive discounts, depending on your insurer.

If you drive an older car, minimum coverage might be enough. Raising your deductible can also lower your premium — as long as you can comfortably afford the bill if you were to file a claim.

Use-based programs that track your driving through an app or plug-in device offer savings or 20% or more. (Just understand how these telematics programs work to determine whether the discount’s worth it for you.)

🔍 Read more: 9 age-smart ways to save on car insurance (that can apply to all drivers)

4. Prevent repairs before they become huge bills

Skipping routine maintenance can drain your budget. Follow your owners manual schedule for oil changes, fluid flushes, belt replacement and tire rotations. These can add up to hundreds a year, but are far cheaper than fixing the major issues — like engine failure or transmission replacement — they’re designed to prevent.

It’s also worth learning simple DIY maintenance like changing filters or topping off fluids yourself as labor costs can double the price of most maintenance services. For bigger repairs, get at least three quotes. Dealerships typically charge between $100 and $200 an hour for repairs, while local, independent mechanics can save you 25% to 40% on the same work — and might be willing to negotiate.

Smart membership pays off too. Sam’s Club members get exclusive pricing on name-brand tires and free installation, while AAA membership includes 10% discounts on batteries plus roadside service that can run you $100 or more without coverage.

Trouble remembering your maintenance schedule? Free apps like Simply Auto, Fuelio and Carfax Car Care track your maintenance history and send reminders when service is due.

🔍 Read more: 7 surprising situations your standard car insurance won't cover

Getty | Sam's Club

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$25 at Sam's Club5. Drive smarter — and less

Did you know that your driving style impacts your wallet? Aggressive driving — hard acceleration, sudden braking and speeding — doesn’t just burn more fuel. It also accelerates wear and tear on tires and breaks. Smooth driving can improve fuel economy by 10% to 15% on highways and 10% to 40% in stop-and-go traffic, according to the U.S. Department of Energy.

Small tweaks to driving habits can improve your savings:

Keep tires properly inflated. Underinflated tires can reduce fuel economy by up to 3%. Checking monthly can save you up to $100 a year and extend your tire life.

Combine your errands. Plan one multi-stop trip rather than separate outings to cut fuel consumption.

Avoiding idling. Idling for more than 10 seconds uses more fuel than restarting your engine, wasting up to $70 a year if you idle 10 minutes daily.

You can further boost your savings even more by carpooling, telecommuting or using public transportation.

Some drivers offset costs entirely by listing their vehicles on peer-to-peer platforms like Turo or Getaround when their car is otherwise sitting idle. Hosts report saving an average $634 a month, according to Turo — potentially covering your car payment and insurance.

🔍 Read more: 20+ clever ways to stretch your dollar (that actually work)

6. Stop overpaying for tires and parts

Repair shops and dealerships often mark up costs for tires, breaks and other car parts by 25% or more.

A set of four mid-range tires at a dealership might cost $800 to $1,000 installed. But those same tires from Costco, and you’ll not only pay less but with free installation, rotation, balancing and often lifetime road-hazard protection. And you might be able to stack manufacturer rebates of $50 to $100 through promotions, so be sure to sign up for alerts to catch these deals.

Ordering parts yourself online can save you up to 50% or more compared to shop prices. But always confirm with your favorite mechanic or shop first: Some won’t install customer-supplied parts for liability or warranty reasons. Your independent mechanic might, though, if you’re a regular customer.

🔍 Read more: 10 insider Costco hacks you can't afford to miss

Getty | Costco

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$65 to $130 at Groupon7. Track every dollar with apps and audits

Most car owners underestimate their true vehicle costs because they’re not tracking smaller expenses that can add up over time.

Vehicle expense tracking apps like MileIQ and Everlance can also help you log every dollar on fuel, repairs, insurance and registration while uncovering “surprise” expenses. Some generate monthly or annual summaries showing exactly where your money goes.

Add calendar alerts to avoid penalty fees of $100 or more that come with late registration, inspections and insurance deadlines. And once or twice a year, review expenses that have jumped the most — fuel, maintenance and insurance — and focus your savings efforts there.

🔍 Read more: Editor approved: 9 best free and low-cost budgeting apps

⭐️ Bonus tip: Right-size your ride

Does your car still fit your lifestyle? Life changes, but many drivers keep vehicles that no longer match their needs.If your kids have grown and flown and you’re no longer carpooling, trading in that roomy SUV for a compact sedan or hybrid can save significant money on fuel and insurance. If you and your partner are working remotely with flexible schedules, selling one of your cars can free up thousands in insurance, maintenance and even parking and registration fees.

Bottom line: Your car shouldn’t run your finances off the road

Car ownership is no free ride, but it doesn’t have to be a financial drain. Buying smart, staying on top of maintenance and strategic shopping for insurance and parts can collectively save you thousands while keeping your car and budget running smoothly.

Start with whichever tip will have the biggest impact on your budget, then layer in others over time. Your future self (and bank account) will thank you for it.

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About the writer

Michael Kurko is a finance writer and editor who covers investing, real estate, personal budgeting and financial literacy. His expertise has been featured in FinanceBuzz, The Balance, Investopedia, U.S. News & World Report and Forbes Advisor, among other top financial publications. In addition to his work in finance, Michael is also a freelance book editor and fiction writer. He strives to make complex money topics clear and approachable so readers can make informed decisions and build lasting financial confidence.

Article edited by Kelly Suzan Waggoner

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