How to Cut the Cost of Driving

Gasoline prices are rising again, but fuel is just one factor in the high cost of driving an auto. The average cost of driving a sedan 15,000 miles a year will cost you $8,698, or 58 cents per mile. You’ll spend 70.8 cents a mile, or $10,624 a year, to put 15,000 miles on an SUV with four-wheel-drive .

Many factors feed the cost of driving: financing, depreciation, maintenance, insurance, and driving habits.

Financing: Credit unions often offer the best rates on loans, but you also should compare the loan term, fees, and prepayment penalties. If the dealer offers a rebate, you may save more money by taking the rebate and financing at Hopewell Federal Credit Union than taking the low-rate loan.

Depreciation: Depreciation is usually the largest part of the cost of driving: AAA estimates the average annual depreciation on a medium sedan driven 15,000 miles per year at $3,654. Kelley Blue Book says that after five years, the average car is worth 35% of its sticker price. But some cars, especially Honda and Toyota, have much lower depreciation. Ignoring the current value of a used car can put you “upside-down” if you trade the car and pay off the loan: You owe more on the car than it’s worth.

Maintenance and repair: AAA estimated the maintenance costs of sedans at 5.11 cents per mile in 2015. Maintenance costs varied widely by vehicle type but, on average, were up slightly from 2014.

Insurance: AAA estimated insurance costs for the average sedan at $1,115 per year, based on a low-risk driver with a clean driving record. Insurance for drivers who are male, younger than age 25, poor students, or have a record of moving violations and/or accidents is more expensive. Raising the deductible and reducing the maximum coverage can lower premiums but will increase your risk.

Driving habits:
* Drive defensively. Try to stay off the road late at night when most accidents occur.
* Keep tires inflated to improve mileage and cut the chance of a blowout.
* Drive mild, not wild: Accelerating slowly and coasting up to stoplights can improve gas mileage up to 30%.
* Use the cruise control for highway driving to save 4% to 14% in gas.
* Drive less to save on gas, oil, maintenance, and deprecation. Think about carpooling, taking public transit, biking, or walking.

Hopewell Federal Credit Union can help with all your auto needs. Contact us today at 740.522.8311.

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