Fewer Vehicles = A Cheaper Auto Insurance Bill

We sold off some of our vehicles this past week. I'm almost afraid to admit just how bad it was, but we had five - FIVE! - insured motor vehicles. Hear me out though!

One was my motor-scooter which had been my main vehicle when we lived in the city. I didn't have a car at the time. Although I tried to sell it before we moved, it just never happened. Despite the fact that I was hardly driving it at all, I still had to pay some insurance for it. Pennsylvania makes it very hard to put a vehicle "in storage" from a legal perspective. This was obviously a candidate for selling. As much as I loved it, and as great as its gas mileage was, I need a car to cover the distances from where we live and to do the things I need to do.

Vehicle #2 is my car, a cheap Hyundai that I bought used and paid cash for.

Vehicle #3 is my husband's car, a more expensive VW that we also bought used and paid cash for.

Vehicle #4 is his old Honda, which he bought before we even met. It's been in another state (where my husband spends a significant amount of time for his work) for about two years. He uses that car to get around when he's away on business travel.

Vehicle #5 is our 1992 beater pick up truck, also bought used for cash. We need this for hauling stuff to our property where we're gearing up to build our dream home. It's also hugely convenient for hardware store runs, or picking up free mulch at the county recycling center.

Although we have great auto insurance, our bill was high with this many vehicles. The most obvious, if painful, step was to get rid of my motor-scooter. After a post on craigslist, I got many, many phone calls, and finally one from someone living in a major city who was serious. She came that evening with a truck and paid me in cash!

The second vehicle that sold is the old Honda. Someone my husband works with had been interested in buying it for its good fuel economy. So after agreeing on a price, my husband drove his VW to the other state and sold the Honda. That means we're down to one car at home now, plus the beater truck. I'll have to share my car with my husband. We drive the truck only when we need its hauling capabilities; it gets pretty bad mileage.

Two vehicles sold in one week! We got them off our auto insurance policy right away, and also found that the policy on the VW is now cheaper because it's in another state. Our total monthly savings comes to over $108! That's whopping $1272 per year, which will get plowed into accelerated payments on our mortgage. And the bulk of the money we got from the sales will also be a sizable extra principle payment next month. We'll keep a small part of the money around as emergency cash.

I wish we could get by with no cars at all. But with no services within walking distance of our home, and our serious winters, that just isn't an option right now.

Tips for the frugal car owner

A car is a practical necessity for many of us. It's also among the most expensive items purchased by many households, and it continues to cost money over its lifetime of use. I'm going to present a few tips here for saving money while owning and maintaining a car. It should go without saying that a frugal person would strive to pay cash for a used car in good condition, which was shopped for very carefully. These tips focus on keeping costs down between auto purchases.

• Drive your car efficiently. Don't take your car out to run a single errand - ever. If you must get to work by car everyday, then make a habit of doing all your grocery shopping and other chores on the way to or from work. If you don't work outside the home, wait until there's a time-critical need to use the car, and then do all your other "whenever" errands on the same day. Always ask yourself if there's anything you need to do along the route you need to travel before you leave the house.

• Clean the junk out of your car. Every pound of weight you add to your car burns up a little more fuel per mile. Keep only what you really need in the car for each trip. Obviously, you need certain items in case of emergencies. The rest of the stuff that just gets left in the car is costing you money for no reason.

• Drive 55 (or less). There are so many frugal reasons to keep to a modest speed, even when the legal speed limit is higher. Fuel efficiency plummets dramatically as a car's speed increases beyond 55 mph. Accident mortality increases in a direct relationship to speed. You're more likely to walk away from an accident that happens while you're moving 40 mph than 60 mph. Also, you won't get a speeding ticket, which can cost you in more ways than one. Not only is paying the ticket like burning cash straight out of your wallet, but your insurance premiums will go up. You could end up paying hundreds of dollars per year for that excessive speed, for years to come.

• Keep the air pressure in your tires at the level recommended by the manufacturer. Low air pressure in the tires results in more drag between the road and your car. That in turn results in lower fuel efficiency. Checking the pressure on your tires is easy and requires only a simple pressure gauge. Make a habit of adjusting the pressure in all four tires once per month at a gas station that has a free air pump.

• Keep your air filter clean. The air filter is another part of the car which can be easily maintained by the owner for a small but significant increase in fuel efficiency. This maintenance is commonly done every 5000 miles. But I recommend that you make it a part of your monthly car care routine. It takes only a few minutes to clean off an air filter with a vacuum cleaner. Check your owner's manual for guidance on locating and removing the air filter in your car.

• Ask yourself if you really need to drive a car. If you live in a major city, there are lots of other options aside from driving a car. And the costs for driving a car are likely higher as well, because you must often pay for parking in the city. The favorite frugal option is to walk, as this provides both free transportation and free exercise. A scooter is an excellent solution for many city-dwellers who travel ten miles or less per day. A scooter is much cheaper to buy, maintain, insure, and operate and it removes a lot of the hassles of driving and parking. How many days each year do you really need those extra empty seats, or weather protection offered by a full-sized vehicle? If a scooter isn't for you, then evaluate your public transit options carefully. Also look into carpooling or ride sharing if your work schedule is regular.

• Don't stint on maintenance. Change your oil on schedule, or get it changed for you. If you live where icy roads are salted in the winter, wash your car so that a simple thing like salt doesn't destroy its value. Sometimes to be frugal you have to know how to spend wisely. Regular maintenance keeps your vehicle running longer and safer to drive. You don't want to end up dead with a lot of money in the bank in the pursuit of false frugality There is such a thing as tightening the belt too far.

• Raise the deductible on your auto insurance. Your insurance should protect you from financial crisis, not protect you from ever having to spend any money at all. Figure out the highest amount you could pay for auto repair without seriously jeopardizing your budget. Set the deductible as close to that amount as possible.

• Check the annual mileage that your insurance policy is written for against your actual annual mileage. If your real usage is higher, the ethical thing is to inform your insurer. If it's lower, you may well qualify for a reduction in your premium. This is especially important check if you no longer drive your car to work. Remember this if you suddenly lose a job and find yourself needing to rein in expenses.

• Use a grease pencil to write a message on the inner face of your hubcaps. Include your name, phone number and a message about a monetary reward for the hubcap's return. Make the reward amount somewhere between 25% and 50% of the replacement part of your hubcap. If you lose the hubcap, you and the finder might both get lucky.

• If you vehicle doesn't already have them, look into VIN etchings for all your windows. There are kits you can order which put an unobtrusive copy of your vehicle identification number on each window in the car. This seriously erodes the car's value to car thieves. Many auto insurers will give you a discount on your insurance if your car includes these identifiers. Check with your insurance company about this before investing in the etching kit.

Hope you found some of these tips useful. Feel free to add your own in the comment section.