Owning a car is expensive — you’ve got to make the loan payments, of course, but there’s also auto insurance to worry about, oil changes, fuel, and replacing the tires every few years. Oh, and registering it and getting it inspected. But depending on where you live in the U.S., you may not be able to get by without a car.
I’ve always lived in a place where I needed a car of my own to get to work and run errands, and I’ve now kept the same one for 15 years and counting. This means I’ve been free of car payments for over a decade. Here’s why this move has been the smartest thing I ever did for my finances.
One fewer financial obligation
Making my last car payment more than a decade ago was easily one of the most exciting moments of my adult life. Before you think that’s sad, you should know that I managed to make all 60 of my monthly car payments in full and on time, even though I was unemployed for more than a year during that period.
The end of car loan payments meant one fewer financial obligation to stress about. When I paid the car off completely, my salary was significantly lower than it had been when I bought it, so this was a big deal.
I was still living paycheck to paycheck, but it was nice to be slightly further away from a financial cliff than I had been. I’ve been through lots of ups and downs with money since then, and it’s always been great to know I don’t have a car payment.
Cheaper insurance coverage
The other big financial perk to keeping the same car for so long is that my insurance coverage is quite reasonable. Part of that is due to me getting older — I was 25 when I bought the car, and I’m 40 now. Drivers in their 20s likely present a higher risk to insurers than those of us who’ve reached middle age.
But the car itself has also aged, and in the event of a wreck, it’s far more likely that my insurer will opt to total it out rather than pay for repairs that will likely cost more than the car is worth. Plus, it came without a lot of the equipment that equals more money paid out by an insurer in the event of an accident.
Cars now come with all sorts of add-ons, but mine lacks Bluetooth capabilities, in-car GPS, and a back-up camera, and the key must be inserted in the ignition switch to turn the car on.
How else can you save on car expenses?
Between 10 years (and counting) without a car payment and reasonably priced insurance coverage, I’m coming out ahead with my elderly car. And that cheaper car insurance is particularly significant, given how much costs have risen over the last few years.
Auto insurance costs are up an average of more than 20% from 2023 to 2024 — even as inflation has fallen. So any money you can save on insurance is a win for your finances.
I recommend keeping your current car for as long as you can — as long as it’s safe to drive and you’re not dumping more money for repairs into it than it’s worth. Here are a few other ways to save on auto insurance:
- Shop around: If you’ve had the same insurer for years, there might be cheaper coverage out there for you — you won’t know unless you check, though.
- Pay your premium in full upfront: Some auto insurers offer discounts to drivers who pay their annual premium all at once rather than monthly.
- Take a defensive driving course: See if there’s a course you can take to lower your insurance premiums. I’ve taken the same one twice now (the savings are good for three years) and shaved 10% off my insurance costs.
- Drive more mindfully: If you have a nasty habit of getting speeding tickets, SLOW DOWN. Being a more mindful driver will save you money and could save your life.
I’ve made a lot of financial missteps over the years, but keeping the same car for 15 years is not one of them. I’d love to drive my old car for as long as possible — especially if doing so keeps saving me money.
