Reducing expenses in transportation can greatly depend on the area you live and work. Here are some ways to reduce your transportation needs and costs.
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Plan your trips to buy groceries and other errands. Consider the perishable items you will have and the location. If possible, drive out to the furthest point and work your way back home to reduce the back-and-forth driving.
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Drive vehicles with higher mile-per-gallon ratings. Your shiny truck may look cool but your fuel bill does not.
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Keep tires inflated to the recommended pressure.
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Stay current on oil changes.
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Resist the urge to just run out for a couple of items. Plan your trips with intention. Make the most of them.
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Consider using public transportation or carpooling to reduce fuel and maintenance costs. Carpooling to go grocery shopping with a friend can be helpful. You may even incur some savings on bulk items.
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If you live in a walkable community, try walking or cycling for short distances.
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Ask your employer if you can work from home for a few days or all week. Explain you are trying to save money on transportation and subsequently reduce your impact on the environment.
Buying a Vehicle
Our culture promotes the new car smell and feel. Everyday commercials advertising a great looking new car come across our screens. The truth is that a new car depreciates in value as soon as it is driven off the dealer’s lot in into ownership. The average rate of depreciating is 20% in the first year. If you finance a $40K vehicle it will only be worth $32K in a year after purchase. The value continues to depreciate over time at a rate of about 10%. While some makes depreciate slower than others here is what the breakdown looks like:
After year one = Purchase price x .20%
After year two = Year one value x .10%
After year three = Year two value x .10%
That means a $40K car would be valued around $26K in the fifth year of ownership, a depreciation of about 35%. in some cases the depreciation is faster. This is why buying a used car can be a better value than a new car. A used vehicle has already depreciated by it’s greatest drop and while it continues to do so, it does at a slower rate.
Know What You Are Buying
Do not buy a car just for the brand. Do your research to understand the brand. Some brands simply have a great advertising team. They stick in everyone’s mind and their initial sticker price is high. We typically associate brands like BMW and Jaguar with high sticker prices and therefore a high income to drive one. While that may be true initially, according to thinksure.ca, the brands with the highest depreciation rates are:
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Volvo (63%)
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Acura (64%)
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Infiniti (66%)
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BMW (66%)
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Lincoln (73%)
According to J.D. Power, these brands will hold their value the most overtime :
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Hyundai (46%)
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Subaru (49%)
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Mazda (51%)
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Honda (51%)
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KIA (52%)
Remember this when you are looking to buy a used BMW vs. a Mazda.
Ultimately you need to purchase smart and maintain the health of your vehicle. Be strategic about where and how you drive.