For most Americans, housing costs are their largest monthly expense. What’s second? Car expenses.
A family with two cars can easily spend more than $1,000 a month to drive. But there’s more to saving money than cutting down on gas.
According to NerdWallet’s Lacie Glover, here are two ways to slash car expenses:
Refinance your auto loan
If you didn’t know your credit score or shop for a loan when you bought your car, it’s hard to know whether you got the best possible rate.
Dealerships—where most people finance their cars—may offer very low-interest financing. But sometimes the rate you get isn’t the lowest you could have qualified for. “Most people have no idea” when it happens to them, says Delvin Davis, senior research analyst at the Center for Responsible Lending.
To see if you can reduce your interest rate and monthly payment, you can apply to refinance your auto loan, meaning you pay off your current loan with a new one from a different lender.
Shop car insurance rates
There’s just one way to make sure you have the cheapest car insurance possible: Compare quotes. You can do this online with a comparison tool, by calling companies for quotes or by visiting an insurance agent. If you work with an agent, keep in mind there are two types:
- Independent agents, who can show you quotes from several insurers
- Captive agents, who sell insurance from only one company
Don’t just settle for an average rate. Shop around and save money!