When many people go car shopping and pick out a new car, they often focus on purchasing the most appealing or stylish model that they can afford with their budget. It is true that you should find a model that you love and that appeals to your sense of style. However, the model of car that you drive can affect your budget in many ways. Therefore, if you are one of the many drivers today who is living on a tight or even a fixed budget, it is important to understand how buying a compact or economy car can save you money.
The Sales Price
The most obvious way that buying a smaller, economical car will save you money is on the sales price. These smaller cars generally are more affordable than SUVs, luxury sedans and other models. The sales price will affect your equity in the vehicle over the years, the monthly payments on your car loan and your required down payment. Because of these factors, the initial sales price on your new car will play a role in your current and future financial situation for years to come.
In addition, choosing to purchase an economy or compact car often can save you money with your budget on a monthly basis through improved fuel economy. These smaller cars generally have a lighter weight and are more fuel efficient. In fact, some of these models may have fuel economy that is two or three times better than some of the other cars that you can choose to purchase. When you are living on a tight budget, the ability to stretch your fuel budget a little farther can be a true benefit.
Auto Cover Expense
Another important benefit that you may not be aware of is that economy or compact cars generally are more affordable to insure than other models. Insurance companies generally will base their rates on a number of factors, and these include everything from the initial sales price or value of the car to the replacement cost, the repair cost and even how safe the cars are to drive. Economy cars may be statistically safer to drive than other vehicles because of their slightly less powerful engine. Powerful engines promote faster driving, rapid acceleration and other behaviors that can lead to accidents. Whether you pay your cover premium on a monthly, semi-monthly or semi-annual basis, you may find that your rates are lower when you own a compact or economy car.
Owning and driving a car can indeed be expensive. There are many costs of ownership, including monthly payments, fuel costs and cover costs. However, each of these factors is influenced in large part by the make and model of car that you choose to purchase and drive. If you have been looking for a great way to reduce your driving expenses and to make it more affordable to own and operate a car, consider how making a switch to an economy car can benefit you.