With the outrageous fees of higher education, trying to budget for the costs of a car might seem completely out of the question for most students, especially when many are left scrounging for funds to meet their basic needs. The good news is that taking the bus until your loans are paid off doesn’t have to be inevitable. Even monetarily-challenged college or university students can have a car if they follow a few basic rules to save money when buying or maintaining their own set of wheels.
If You Haven’t Bought a Car Yet
This may go without saying, but the first thing you should do before you buy a car is make sure you can actually afford one. Most financial experts advise that your monthly car payments should be no more than 20% of your monthly income (after deductions). For example, if your net income each month is $1,000, your car payments should be no more than $200. Bear in mind that this amount doesn’t include vehicle-related necessities like insurance, maintenance, and repairs, which can all be very costly. To give yourself a bit of a buffer for these additional costs, you can try to keep your car payments at 15 or even 10% of your income, but you should never go above 20%, which can spell disaster for anybody regardless of what they earn.
When deciding on which vehicle you want to buy, it’s important to consider fuel consumption. A lifted truck, for example, is going to use way more gas than a compact hatchback, so carefully compare fuel consumption ratings for both highway and city driving. If you’re not sure if you want to buy new or used, consider whether you can afford higher monthly payments or the expenses that arise when a used vehicle needs repair outside its warranty. New cars cost more than used cars, but they also come with a warranty that covers any repairs over the first few years, usually around 3 years/60,000km for the basic warranty and a 5 year/100,000km powertrain warranty. Decide whether or not you’re willing or able to drop thousands of dollars for major repairs or if it’s easier for you to make a higher monthly payment.
Another option to consider is the Certified Pre-Owned vehicle. These vehicles are used so they’re cheaper, but they have to go through rigorous inspections and repairs and generally can’t be more than a few years old or have too many kilometres on the odometer. Some Certified Pre-Owned cars even come with a two year warranty and Roadside Assistance, so it’s like getting the best of both worlds. Just remember that new car warranties and Certified Pre-Owned programs vary by manufacturer, so make sure you do your research before committing to anything.
How to Save on the Car You Already Have
Whether or not your car is extremely affordable or costly to maintain, you can still save money for more important things by following these easy tips:
- Carpool. Carpooling is a win-win: your classmates get a cheap ride to school and you get some extra cash to drive yourself somewhere you’d have to be anyway. If you recruited three other students to carpool with you for $10 a week for two four-month semesters, you end up with an approximate $960 in your pocket. This money can be used to save for maintenance and repairs as they arise or used towards insurance, fuel, rent, or food.
- Maintain your vehicle. It’s tempting to forego those constant oil changes, filter replacements, and the like, but your car’s manufacturer provided you with a recommended maintenance schedule for a reason. Sure, putting off replacing your oil can save you money in the short-term, but if you put it off long enough, you’ll eventually destroy your engine, which can cost thousands of dollars to replace. Even if your car is new and still under warranty, you’ll be stuck with the bill because you didn’t keep up with the maintenance schedule.
- Monitor tire pressure. Maintaining the air in your tires is cheap, easy to do, and will save you money. For just a few dollars, you can buy a tire pressure gauge to make sure your tires are inflated properly then replace any lost air at your local gas station. Doing so can save you lots of money, because driving with under-inflated tires can increase fuel consumption by up to 4%. Don’t try to take any shortcuts by over-inflating your tires though; just keep your tires at the manufacturer recommended psi to maximize fuel economy.
- Don’t be an aggressive driver. Late for class? Try to resist the urge to drive in a panic. Aggressive driving (going over the speed limit, lots of braking, and accelerating too quickly) can increase your fuel consumption, the wear and tear on your car, and your chances of getting into a collision or getting a ticket (which will increase your insurance costs!), all the while shaving maybe a few minutes off your commute, if you’re lucky. For the best fuel savings while driving, Natural Resources Canada recommends that you drive between 50 and 80km/h (when appropriate and permitted, of course), maintain a steady speed, try to anticipate delays or traffic, and coast to decelerate. Following these tips can help you save up to 25% more fuel or up to $500 each year.
- Shop around. Don’t buy anything for your vehicle without shopping around first. It’s easier than ever to compare prices, thanks to the Internet, so before you go out and buy any part or accessory for your car, make sure you compare prices and take advantage of sales or coupons.
- Lower your insurance payments. Every year that you’ve been driving without infractions means potential savings on your car insurance payments. Get quotes from multiple companies on your driver’s license anniversary to see if there are any opportunities to save. You may also want to call your insurance company to find out if there are any unused discounts available for you as a student or get quotes from insurance companies that do offer student discounts.
- Do it yourself. The next time you need to replace your windshield wipers, switch out your winter tires, change a head, taillight, or similar, save money by doing it yourself. The Internet is full of helpful tutorials on how to do various vehicle maintenance tasks yourself and even something as simple as washing your car yourself can yield some long-term savings. However, doing your own maintenance and repairs on a vehicle under warranty can void the warranty, so always check to make sure doing something on your own is okay first.
The costs of being a student can mean it’s difficult to make ends meet, but even the poorest of students can often budget for a car. Just remember these easy money-saving tips, like driving safely, shopping around, and maintaining your vehicle. They can help you save money now or at any stage during your long career as a Canadian driver.