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With new cars now costing an average of $25,499, it’s important for drivers to protect their investment with a warranty and insurance. But if you’re planning to a buy a car in the near future, you should follow some tips to save money on these protection services. Although warranties and insurance are usually a smart investment, they can often jack up the total cost of ownership (TOC) associated with your car.
While most new cars come with a manufacturer’s warranty, such as a four-year or 40,000-mile warranty, you can often purchase additional coverage like a powertrain warranty. This special warranty covers repairs associated specifically with your car’s engine, drivetrain and transmission, which are usually more expensive than other automotive repairs. If your car blows a head gasket, for instance, a powertrain warranty can save you thousands of dollars on replacement services.
The amount of miles you drive per year will affect your insurance premiums. Most insurance companies offer low-mileage discounts for drivers who clock 7,500 to 15,000 miles on their odometer per year. By keeping your mileage within this range, you can save 5 percent to 10 percent on your premiums. You can also save money for practicing good driving habits, provided that you have a monitoring device placed in your vehicle.
The type of car you drive will also affect your insurance premiums. Insurance repairs for heavy vehicles are usually more expensive than those for compact and midsize sedans. Therefore, insurance companies charge more for coverage on heavy and large vehicles. As a side benefit, you’ll save money on gas with a small car because of their high fuel-efficiency ratings.
Car warranties, especially those offered from third-party companies, typically require drivers to perform scheduled maintenance on their car. If a driver fails to perform the necessary maintenance, his or her claim may be denied. To prevent this from happening, check the maintenance requirements for your car’s warranty. And if something isn’t clear, contact either the dealer from whom you purchased the car or the warranty company for more information.
Finally, your credit score may affect the cost of car insurance. Although there are a few exceptions, insurance companies in most states are allowed to charge higher premiums to customers with bad credit. If your credit history has inaccuracies or outdated information, resolve them for potential cost-savings benefits on car insurance.
Don’t let the high cost of insurance or car repairs send your bank account into the red zone. Follow the tips listed here to save money and protect your investment. They can help you when getting a new car, as well as maintaining your current vehicle.