Personal finance tips: how to budget for car expenses

Budgeting is not something that many of us like to do. It fact, it seems to be a chore that is very much dreaded; in fact, we even find ways to procrastinate so we won’t have to deal with the task. But, we all know that eventually we’ll be forced to face the reality of any debt and the everyday expenses of just being alive! So, take a deep breath, find all your bills and start making that list. When making out your budget, be sure to include a category for car expenses. You might think all you have is a car payment; but, in reality you also have to include additional items to budget such as car insurance, tires, oil changes, oil filters, tire maintenance and gasoline.

First, consider the main expense of your car. This is usually a rather large monthly payment that goes to the bank or finance company. If you read the fine print, you’ll see that your car is really costing you much more than you might think. Some people are lucky enough to purchase a car outright and are able to delete this hefty number from their budget book. So, if your car isn’t paid off yet -- consider speeding up the process by paying an additional amount on the principal of your loan. It will be great when you are able to write ZERO on the amount owed for your car!

When you get to this point, maybe you can purchase one of those bumper stickers with the words PAID FOR CAR on it!

When you have a zero balance in this category, you may want to consider continuing to make a car payment. Pay yourself by putting the amount of the old car payment into your bank account. When you are ready to purchase a car later – you’ll have some cash!

Listed after your car payment, the next largest expense for your car will be the tires on your car. It is very important that you have the proper tires for your vehicle. If you are not sure, refer to your owner’s manual; it provides the specific requirements for your vehicle. Maintaining the proper air pressure in the tires will prolong their life as well as having the tires rotated and balanced occasionally. The cost of purchasing new tires will also need to be included in your car budgeting category. The cost of tires can vary depending upon the type of tires your car requires and where you purchase them. Do not take a chance maintaining tires – maintaining the tires on your car can save your life as well as anybody else who may be in your car!

The third expense item in your car category is usually your car insurance premiums. Take the time to review several insurance companies and compare prices for car insurance. If your car has a lien on it, you don’t have a choice – you will need to purchase full coverage insurance and not just liability insurance. In fact, consider carrying full coverage even if you have a paid for car – unless you will be able to replace the car if something happens. If you request to raise your insurance deductible, your insurance premium will most likely decrease. When considering insurance options, be sure to ask about underinsured motorist coverage as well as uninsured motorist coverage. You may also want to consider adding an umbrella policy. There are various state insurance regulations for comprehensive, collision, and medical coverage required. Check with your insurance carrier to make sure you are properly insured in your state.

Also, when budgeting for car expenses, you will need to include the cost of oil changes every few thousand miles. Oil filters can be listed under this category as well. The expense of having the oil changed in your car can vary. It may be less expensive if you can do it yourself. On the other hand, it may be more convenient to have someone else take care of this chore. Either way, make sure this expense is a part of your car budget.

One expense you will definitely have for your car is gasoline – if you want to go anywhere in your car! Be sure to have a gasoline expense category in your car budget. The cost of gas, of course, can vary from state to state or from station to station. Try to average the cost you spend on gasoline the best you can. If you do this, you will be able to average the cost over a certain time period, which will help you better determine the appropriate amount to allow for this category.

A miscellaneous car expense category in your budget allows for various items, such as, roadside services, jumper cables, and monies needed for toll roads. You can also include any items such as fancy wheels in this category.

So don’t procrastinate now that you know how to budget for your car expenses – implement your budget!