Adulthood can be tricky to navigate, especially where money is concerned. If you’re a new adult, you may be surprised at the hidden costs that a car carries with it, from maintenance to insurance.
Here are some ways new adults can save on car costs, vehicle upkeep, and insurance. Specifically, we’ll go over how much insurance costs for an 18-year-old female versus a 78-year-old male, how rates decrease with age, and what kind of policy you should get.
How to Save When Buying a Car
The average young adult doesn’t have a huge vehicle budget, and if that describes you, a used car might be your best option from a financial standpoint.
Do Your Research
You’re probably an excellent researcher already. Maybe you’ve looked into hiring trends when searching for a job, or you investigated which microwave is the best value for your dollar. Well, you can also search for used cars online and start learning.
By following used vehicle sales on the internet, you’ll better understand what a fair price is. Then, if you go to a used car lot or deal with a private party, you will be educated and avoid being an easy target for being scammed.
A confident car shopper will usually have a better buying experience. When you know what you’re looking for and how the market is, you’ll naturally become more confident.
Know Your Budget
A used car dealer may try to talk you into more vehicle than you can afford. Don’t let that happen. You should understand how much you can afford for a loan, how much down payment you can make, and how much you should budget for insurance and maintenance. Stick to your budget.
Skip the Extras
If you purchase a car from a dealership, they may encourage you to buy a scratch-and-dent package or something similar. These packages are money makers for dealers, and there are only rare situations where the benefit would be worth the cost, so save yourself the expense and skip them.
Ways to Save on Car Maintenance
There are several costs associated with vehicle ownership, and maintenance is one of the costs people forget to budget for. It’s easy to remember to budget for your vehicle loan, fuel, and insurance because those costs tend to be regular. Maintenance isn’t always as regular as those vehicle costs.
There are several ways to save on maintenance, and one of the best ways is to invest in preventive maintenance.
You may be tempted to avoid regular maintenance because, as the saying goes, “If it ain’t broke, don’t fix it.” But, unfortunately, if you wait until your car is “broke” you’ll end up spending far more than you would have if you had just kept up with regular maintenance.
Just as exercising to prevent injuries can save you from physical pain and suffering, preventive car maintenance can save you from financial pain and suffering.
For example, most vehicles require an oil change three or four times a year. It will probably cost less than $50, but you may still want to avoid spending that money. If you drive with dirty or low engine oil, you’ll damage your engine, and repairs will cost far more than an oil change would have. If you end up needing a new engine, you might as well buy a new car, in some cases.
Drinking water keeps your body working properly, and maintaining your car keeps it in optimal shape.
Fix What You Can
You might not be mechanically inclined, but you can probably change a car battery. If you are confident working with motors, you can probably do quite a bit of your vehicle work on your own. Every time you do the work, you’ll save yourself from paying a mechanic $80 or more an hour.
Repairs are done differently based on the type of vehicle, so while an alternator may be a cinch to change in one car, it might require an engine lift on another.
Wash and Wax
Hand washing and waxing your vehicle will help extend the life of the exterior, which will help it maintain its value better. A shiny car is a lot more desirable than a rusted-out comparable car.
Save on Car Insurance
Unfortunately for you, young adults pay the highest car insurance rates of any age group.
Comparison of Male to Female Rates
A few states have banned insurance providers from including gender in their rate calculations, but insurance providers base rates partially on gender in most places. Since teen and young adult males are statistically more likely to be involved in accidents, insurance companies charge them higher rates to compensate for the additional risk they assume.
We’ll compare some examples from State Farm because it’s available in every state and is the largest car insurance provider in the U.S. If you study this subject, you’ll discover that all the other major insurance companies’ rates correlate to these examples.
While a 17-year-old female will pay an average of $5,954, a 17-year-old male will pay $7,324 annually for car insurance. When you break that down into monthly premiums, females will pay $500 a month for insurance while males will pay about $610 per month.
Female or male, there’s no denying that 17-year-olds pay incredibly high car insurance rates. However, by the time those teens go through early adulthood and reach their mid-20s, their rates will drop by half for females to $2,336, and two-thirds for males to $2,555. By 25 years old, the insurance rates are far more comparable between the sexes than they are at 17.
Eighteen-year-old females and males will usually pay slightly lower rates than 17-year-olds.
Did you realize you may have options on what kind of policy you can get? Getting your own policy may be the best fit for you, but if you live with your parents, you may be able to save money by staying on their policy and reimbursing them for the cost of having you on their policy.
If you don’t live with your parents, you’ll have to get your own policy. While there are many excellent insurance companies, a comparison search can help you find budget auto insurance so you can save as much money as possible.
There are a few key discounts that specifically apply to young adults many times.
- College student away from home – If you go to college over 100 miles from home and don’t take your car with you, you may be eligible for this discount.
- Driver’s education – Most car insurance companies reward young adult drivers who graduated from driver’s ed with a discount on their car insurance premiums.
- Good student – If you maintain a B average, you’ll usually earn a discount. You may need to turn in a copy of your report card, so if you get good grades, save your copy of them.
You can alleviate a lot of financial stress by reducing vehicle-related expenses. Following these tips can help you stay on budget and avoid overspending on your car and insurance.
Melanie Musson writes and researches for the car insurance comparison site, CarInsurance.org. She enjoys helping others understand their insurance needs so they can protect their financial stability and build a secure future.