Financial Literacy Month is the perfect time to evaluate your financial health, and budgeting for auto-related expenses is a great place to start. By proactively managing your car expenses, you can ensure that you’re prepared for both routine maintenance and unforeseen repairs.
Auto insurance is also a critical component of car ownership, providing financial protection in the event of accidents, theft, or other damage. Th e ability to get and keep insurance is closely tied to a customer’s overall financial health.
Routine Auto-Related Costs:
Car Payment: If you’re paying off a car loan, budgeting for your monthly payments helps you steer clear of late fees and ensures you don’t default on your loan, keeping your credit score in good shape.
Fuel Costs: With fluctuating gas prices, make sure that you consider fuel expenses in your monthly budget. According to J.D. Power, the average American spends $150 to $200 on gas every month. Some ways to reduce fuel costs are by driving a fuel-efficient vehicle or using apps to find the cheapest gas in your area, which can help manage transportation costs more effectively.
Insurance: Budgeting for insurance premiums guarantees coverage in the event of a crash or other covered loss. Maintaining continuous coverage may lead to future policy discounts, allowing you to save on your insurance premiums down the road. You can lower your premiums by choosing a higher deductible for comprehensive and collision coverages, or by paying a larger down payment on your premiums.
Maintenance: Regular maintenance, such as oil changes, tire rotations, and inspections, is necessary to keep your car running smoothly and prevent costly repairs down the line.
Additional Expenses: Other potential auto-related expenses to consider are registration fees, taxes, parking fees, and any optional add-ons like roadside assistance or extended warranties.
By including these expenses in your monthly budget, you can better track your spending and avoid financial surprises related to your vehicle.
Maryland Auto offers a Financial Education website with resources to help you understand and manage your finances year-round. Visit https://mymdauto.com/resources for more information.
