The moment you buy a new car – the value of that car drops. That means you could have literally sat in a $40K car just once and as a result, it is now worth $38K – a loss of $2000 as quick as Hugh Jackman on a flying fox.

Why do people buy new cars?

They think they are more reliable. They think that they will last longer. Well sadly, both of those reasons are nothing more than myths.

Reliability can be assured in the sale of a second hand vehicle by simply buying from a reputable dealer. Odds are the car will come with a warranty and inspections that guarantee the car to be of a high quality.

As for the car lasting longer, this is the laughing stock of the industry. The average car ownership time frame is less than 5 years, yet we all think our new pride and joy will be a forever purchase. I assure you it is not so stop thinking like that.

How can you buy a new car without paying a new car price?

Why not search the car classifieds for someone who has not taken this advice and is selling a brand new car for well below retail? I like the idea of someone else other than me doing their money on the car only to give it to me for below retail.

Alternatively you could look to buy demonstrator models – e.g. cars that have been driven around the block by the dealership when trying to make a sale. Chances are the car is in pristine condition, done only a few thousand kilometres and will come in well below the retail price. Once again, you have let someone else wear the costs.

Another tried and tested way of saving money is to look at reputable car yards by big manufactures – e.g. visit a Toyota dealership for the cars that others have traded in. The cars will be in sellable condition if they are on display and with a bit of bargaining, the price can also be lowered.

What Can You Afford?

A car requires a major expenditure of capital. Beyond the upfront cost of the wheels, you then have major costs associated with rego, insurance, roadside assistance, repairs, tolls and the ghoulish demon, petrol. You’ll need to fully investigate these costs, and be able to budget them into your lifestyle. For instance, will you be able to afford all of this upfront or will you need to borrow a loan to buy your vehicle? And, if that’s the case, what level of repayment can you comfortably absorb into your lifestyle, including the extraneous costs of actually running the thing. Second-hand cars are a fact of life for most of us, so mortgaging your next five years in order to get a brand-spanking new machine should not be a priority.

Choose A Loan

Generally, I’m fairly uncomfortable with personal loans but putting together the capital for a car can be nigh-on impossible so I understand their purpose. According to the MoneySmart website, loans are usually for a term of 12 months to 5 years and are usually fixed rate loans, so the repayment amount will not change over the term of the loan. Should you pay off the loan faster than anticipated you may be required to pay an early termination fee. If you don’t pay of the total amount by the end of the term, you will be required to either pay it as a lump sum or refinance.

Secured Versus Unsecured

Secured loans require an asset, usually the car you’ve bought. Should you default on your repayments, the lender is able to repossess the asset and sell it to regain the borrowed money, without going to court. Usually these are loans that are for newer cars. Remember that cars are a depreciating asset, so if your car resells for a lesser price, you will be required to pay the difference. Unsecured loans are loans without assets as security. Generally you can borrow less and the interest rate may be higher. More usually, these will be for second-hand vehicles.

Other Finance

There are other ways of financing a vehicle. Some dealers can offer finance, though MoneySmart suggests often other lenders will organise better rates for your loan. Research will be key to saving you money here, as it often is. Leasing a car is exactly that- you lease a car for an agreed period of time. Once that time elapses, the car is sold. You can make an offer, but often the car will be sold elsewhere so don’t invest in this unless you have a desire not to own a car in 1, 3 or 5 years time and the lease is convenient.

Drive Less

Alright, bit obvious. Well, kind of obvious, but amazingly important. Our car usage is often because we don’t think things through. We leave things to the last minute, so we have to take the car as opposed to catching the train. Or we don’t plan our weekly meals, so we drive up to the shops daily as opposed to just once. With a bit of thought, you can drive less and save on petrol. Or, if you’re really keen, trade in your gaz-guzzler and get a hybrid that will use petrol efficiently. It might be a large outlay, but the savings on petrol might make it worthwhile in the end.

Schedule

Schedule all your appointments, shopping and errands for the one day. It’s a good idea anyway- saves on time, helps you to structure your week, and means you get all your stop-start driving done in the one day. It’ll leave the rest of your week clear to get the more important things don, and save you on go-go-gas.

Circle It

Don’t drive in a star, covering and re-covering the same ground as you go. Plan your drive in a circle or semicircle from your home. It’s a simple way to save on unnecessary expenditure, and it doesn’t hurt the environment either.

Research

It’s got to be one of the worst feelings- you’ve just filled up at a petrol station that you thought was pretty reasonable, and five minutes later, you drive past a petrol station, selling it for 5 cents a litre cheaper. The rest of your day you spend cursing your luck and lack of patience. Take the guesswork out and do a bit of research- there are plenty of websites or radio shows that will showcase the cheapest petrol of the day. And now that cheap day has moved from Tuesday to Thursday, try and ration your petrol until the cheaper days and don’t fill up on weekends.

Lose The Road Rage

Lots of stopping and starting in traffic is going to burn your petrol like no tomorrow. Take it calmly, don’t hit the accelerator- you’re probably only going to get five metres anyway- and then be forced to brake in a hurry. Stick to low speed limits, try and avoid rush hour and don’t drive as if you are part of the Fast and the Furious.

Get Old School

Our parents and grandparents were naturally frugal people- they only drove when necessary, they car pooled to work, school, the Saturday morning soccer game. Ask to pool with your neighbours or your kid’s friends from school. Our grandparents caught trains, either the entire way, or left their car at the train station. They walked to the store, or shopped once a week.

As one friend said, “Cars. They break your heart”. They also have the tendency to break your bank account. Here are some of the bigger money pitfalls in dealing with the dealings of our four-wheeled friends, and how to avoid them. Thanks to MSN Money for inspiration.

Premium, not regular petrol

Giving your car ‘presents’, like nicer petrol, is a bit odd. Let’s be honest- they can’t hear you, and they’re not going to run nicely because you’ve been so sweet. If you’re driving a car from pre-1992, steer clear of ethanol petrol because that’ll kill it faster than a fly swatter on a lazy fly. If not, premium is a money drain that you can ill-afford.

Getting Stingy

Sometimes we get stingy at the worst moments- we ignore the manufacturer’s suggested oil change timetable, or avoid changing the timing belt. Then the car breaks and we have to spend a fortune fixing the rotten thing. Avoiding this is easy- follow the instructions, and spend money when required. That said, don’t believe the dealer when he suggests you get a major service every thirty seconds which, of course, he will provide.

Services at the Dealer

Independent shops will generally do cheaper, more efficient service than the major dealers. Take your owner manual and see how it goes. This is an important relationship, so spend some time asking around. Word of mouth is the best bet and once you’ve found your man, never let him go. If you’re getting repairs, before you pay for the job, have a look at the work or drive the car around for a bit to check it truly is fixed.

Paying To Have Wiper Blades Changed

Once a year, buy a new wiper blade and fit it yourself. Get DIY and don’t believe people who try and convince you that it’s a job to pay someone for. It’s a pretty self-evident process and getting someone else to do it for you is a waste of money. The same goes with air filters. It’s a five minute job. If you’re living in a dusty climate, it is advised you change it with every oil change. If not, then every 30, 000 kms should do the trick.

Losing Records

Keeping a record of all the repairs done to your car will not only help you to decide if something is a serious problem, it’s also great if you decide to sell it on. Having a comprehensive list of repairs is a great bonus should you want to move the car along. Records will also help should there be any warranty on the repairs.

Giving Up

Nothing drives me more crazy than companies who make it difficult to claim warranty so people have to give up. I know it takes a lot of time (that none of us have) but it’s a deliberate policy on their behalf to save money. So save your money, not their multi-billion dollar bottom line, and fight for your warranty. There’s no need to be unreasonable, but stand firm on what your contract of sale says and if they’re being a pain, call a consumer watchdog for advice,

How to drive

Sounds plain and simple and you would hope a basic level of competence exists for all drivers, but I’m sure we’ve all been behind the wheel at times thinking “where on earth did that guy/gal get her licence?” For nearly 15 years my mother could not for the life of her reverse parallel park. I remember as a child in the backseat of the wagon hearing horns blaring as she spent 15 minutes trying to get her tail end into a car park.

There are advanced driver training courses held in each state as well as lessons available from private companies. The cheapest option however is to go back to basics, take the car out to a quiet street or car park and practice. Just 30 minutes a week of practice could avoid an accident in future. So if you’re hearing more horns than Brisbane wharf at 6am, then maybe it’s time to brush up your skills?

Understanding how to drive properly will result in less tickets, less anger when driving and result in a more economical car for you and your family.

The whatsa-ma-callit next to the thing-me-bob is making a thud noise

Ever had a mechanic look at your strangely whilst you try to describe what’s going on with your car? Ever been charged $200 for head light fluid? You might as well have the word ‘sucker’ tattooed on your forehead. I’m not saying you should know exactly how your car functions, but a basic understanding of what parts are called and what they do certainly helps when something goes wrong.

Read your car manual if you have one, or speak to an educated friend who can explain a few basic things under the hood. Your local library should have a range of books on cars and maintenance. Knowing where the oil goes and why it’s important will come in handy in the next part.

Basic home maintenance

If you lack upper body strength like myself, then changing the oil in your car is probably not an option for you because those oil filters are often on tight! Knowing how to check your oil though and top it up when it’s low is essential to keeping your car running. Take a trip to your local Autobarn/Supercheap and compare prices for your car’s grade of oil.

Quite often around father’s day the stores have a sale and this is a great time to stock up.

Can you locate the air filter? This is easily replaceable; just make sure you get the right size for your vehicle. Check the overflow level for the radiator, are you coming into winter? Will it need anti-freeze instead of just coolant? Always make sure you have a supply of this in the garage/shed and check levels regularly. The cost of $10 worth of coolant once every 6 months is far cheaper than a cracked head/ blown gasket/new radiator which start from $500.

Lastly if you are going through more than 1 litre of oil a month, it’s time to question why, this means a trip to the mechanic.

Standing your ground

If your car is leaking oil/ radiator fluid/ transmission fluid your mechanic will investigate why. It might be as simple as replacing a seal or as complicated as replacing a pump.

Before you authorise any repair to be carried out, ask specifically what is wrong with your car. It may be the case that a re-conditioned part will do the job and if that is the case, get the mechanic to ring around for you. Quite often they will get a better deal than someone from the public, so before they do the work on the car, get them to do leg work in getting you the best deal. It is also important at this point to get an estimate of the total cost based on the repairs they have said are necessary.

I used to think my local mechanic was looking after me by checking spark plugs, rotating my tyres and replacing brake pads until I realised I was paying for all of it when all I went in for was an oil change. You are only authorising them to perform the work they have advised is necessary and therefore this is all you are required to pay for, any little extras should be at their cost not yours.

How much is it really costing you?

You’ve bought an older car, because it was only $2,000 and you didn’t have any more money to spend. It’s a good start because the last thing you want to do is get into debt, but how much is an older car costing you in comparison to a newer model? Is it leaded fuel and you’re spending an extra $10 in additive each time you fill up? Is it economical, or are you only getting 300km to a tank and therefore have to fill up more often?

Are you taking it in to the mechanics every second week to get something else replaced? It could work out that buying a $5,000 car could save you more in the long run even with a small personal loan. So shop around, get your potential vehicle inspected by a registered mechanic or NRMA inspector and do your research, www.redbook.com.au gives an anticipated value on second hand cars and has statistics on fuel consumption.

That said, before I join the throng of Kerouacs and Hunter S. Thompsons wannabes on the road, maybe I should think about my finances. After all my dark thoughts about the cost of public transport, the thought of the expenditure on a car is frightening.

This was all inspired by an article on the benefits of car-free living by Orien Kriegman on Alternet. The article centred on intangible benefits, as well as the ones you can feel in your pockets. So, what reasons are there for not having a car?

Peace of mind

Sure, the late night train home is generally unpleasant. There’s always that bunch of teenagers, where taste in music has an inverse relationship to the decibel level with which it is played. The seats are uncomfortable, and you can’t adjust the heat levels.

You also never have to push a broken-down car off the road, apologise to other people when you’ve pranged their car, sit in Parramatta Road traffic or visit your mechanic three times before the problem in the gear box can be fixed.

You’re the best person to judge the price of that kind of peace of mind. Some people might say it was priceless.

Eco or Ego

In this age of eco-conciousness, it continues to amaze me that people still buy such unfriendly vehicles. With the variety of great cars out there that have high fuel efficiency or are at least a little bit friendlier towards the environment, all I can put it down to is ego winning out over the eco. Sure, cars are stereotypically status symbols. But to whom? Would I be more impressed with someone if I knew they drove a Mercedes? Probably not.

I would be impressed if someone caught the train to work because they were worried about the environment. The beauty of it is that you are saving a lot of money on fuel costs. The money spent on your train ticket would have been spent a hundred times over if you drove instead.

No slipping

The pesky things about cars is the upfront cost might seem low, but the fees that come with it add up. The wonderful thing about living a public transport existence is that the costs are upfront and unlikely to change dramatically. They are never going to throw your entire budget off like a car might.

Think about the insurance premiums, green slips, parking and mechanical costs. You’ll save hundreds of dollars annually on those costs alone if you lead a car-free life. And your budget will be accurate and unlikely to blow out. A car is a wonderful and helpful machine, but it’s not a savings device. If savings are the name of the game for you right now, think about getting around in a two-legged fashion for a whole.

How much do you think you save living without a car? Is having a car worth the cost?

There are a few things you can do to minimise the ongoing costs of your car.

Car pooling to save money

Car pooling is becoming more fashionable and popular as petrol prices remain high and Aussie cities remain choked with rush-hour traffic. Most people car pool with colleagues or friends who work in their vicinity. If you can find someone at your work who lives near you and is willing to car pool you can literally halve the weekly cost of your petrol. Since you’ll be driving your car less you’ll also increase the time between services and reduce general maintained costs.

If you don’t have any acquaintances who are interested in car pooling, try a website like Gum Tree.

Handwash your car to save money – not pay for it

A full commercial car wash can set you back about $$$$$, a cost that adds up if you wash your car every fortnight or even every month. Compare that to the cost of a soapy bucket of water, a sponge and a little elbow grease and the maths does itself.

Service your car cheaply and regularly to save money

You shouldn’t neglect your car and the better condition you keep it in, the more value will be sustained in the vehicle. Service your vehicle promptly when it’s due and keep the log book in good order. This will also add value to the vehicle if you decide to sell and lessen the risk of serious wear and tear.

Know when to sell your car and what car to buy

Keep your eye on the market and know how much your car would be worth if you elected to sell it. If it looks like the value of your car is going to plummet, try and sell the vehicle and replace it with a model which will hold its value. This way you avoid losing thousands of dollars each time you buy a new car.

As much as possible, pay particular attention to the fuel efficiency of a vehicle and take that into account when deciding what car to buy. You should also consider how a model holds its value.

Have comprehensive insurance

This is a good example of where it pays in the long term to spend a bit up front. Accidents happen all the time and unless you have money to burn, the last thing you want to worry about after a serious prang is financing a new car. The most important thing is to research different policies and make sure you buy one which suits you and your budget.

Then there’s the matter of actually parking. Having successfully achieved my full license having made only one reverse park in my life (that of the actual driving test), some spots prove too much for my parallel abilities. On top of that, I seem to have some kind of spatial awareness problem, resulting in scratches, dents and many tears in several different carparks.

If that wasn’t enough, they want to make you pay for the privilege of this horrible experience. If it were a couple of dollars here and there, I could overlook the insult but parking fees (and fines when I choose to ignore the fees) end up a huge amount of money, especially if you need to park for several hours.

So how can you save money on parking?

Don’t drive

That’s right people. I thought I should start with the obvious. Parking in the city is a nightmare, so why not hitch a ride on a bus or a train and pay $2, not $25? If needs be, you can drive from your house and leave the car at a transport hub and save yourself money that way.

Embrace your own two feet

I’ve been known to walk a long way to avoid paying for parking. Such Meccas do exist, and you would do well to investigate where they can be found. Sure it takes you a bit longer, but a little bit of walking can’t hurt and you’ll save yourself a couple of dollars every day, so your wallet can stop hurting too.

Know your freebies

Lots of car parks have special deals- say, the first three hours are free. Use these whenever you can. You can only use them once a day (so, the driving around the block and reentering routine may not work so well) but it’ll save you a lot of money, especially if you can manage to get your business down in under three hours and then hightail it without having to spend a cent.

Check student rates

This won’t work for all of us, but if you’re a student, chances are the carpark near to your university will offer you a discount on all-day parking.

For Sydney University students, parking at Broadway is $10 for an entire day, which is ridiculously cheap in the current climate. Asking for students discounts is always a money saver, as it is sure to pay off at some point.

Move it

If you’ve got a 1hr parking spot for free, then don’t leave the car there for several hours. Some days you get lucky, and no one books you, but the cost of a parking fine is huge and will add up over the years. Move the car within the allotted time and you’ll end up saving a fair amount of money.

Try and avoid the temptation of alluring bus stops and ‘no stopping’ signs- they are there to tease you, and you might as well accept that.

How do you save money on parking?

Do you find it to be an expense that can be eliminated?

I have an aunt who likes to jump on the train. Destination is irrelevant; it’s the adventure a train can bring that she enjoys. She’ll just jump on at one stop, and get off at another. She says it’s a wonderful way to get out of your comfort zone. She also says it’s one of the cheapest ways to enjoy yourself in Sydney.

I have to say I agree with her. The departure terminal is tricky I grant you. So many useless items you might just need. But if you can remain strong and not buy the latest edition of Who Weekly complete with Sealed Section lift-out, you can save yourself some dough. All you need is a ticket and a toilet stop, and off you trot.

Here’s why I like trains as a saving measure.

I can’t buy anything on a train

It’s quite a relief. It’s also why I like riding trains while I’m doing assignments. I can’t waste time browsing the Internet or Twittering, and I can’t buy myself yet another chocolate “because I deserve it”. I grew up in the Blue Mountains. This necessitates a long time of trains. I’ve probably saved thousands of dollars, shed several kilos and finished several assignments because of the stretch between Penrith and Katoomba.

People kindly provide free newspapers

The ultimate train newspaper is mX, which peppers any commuter train around 5pm. If you ride the trains on Saturday morning, you can be sure to come across at least part of the Herald. I get most excited when I come across one of the local rags, and I can catch up on all the community gossip for a place I’ve never been.

It’s all BYO

I honestly think it’s one of the best feelings in the world when you have the time to enjoy a train trip. You’ve got ever-changing landscapes in front of you. You pack yourself lunch, grab the book you’re currently immersed in and a window seat and settle in for a couple of hours. Heaven.

There’s always entertainment

Should you be without a book or feel uninterested in the landscape, there’s always something going on within the carriage. I caught a train a couple of months ago with a gypsy band and they got bored about halfway and played us the whole way to Katoomba. It was wonderful. Less wonderful are the squalling children, squabbling couples or people who feel the need to dissect their love lives on a mobile. These types are less wonderful but are entertaining nonetheless.

If these things aren’t good enough, there is a list of Twenty Things to Do When Bored on a Train.

Some of these suggestions are sensational, my personal favourite is #4 which includes passing out lyric sheets for Kumba-ya.

Please email and tell me if you do any of these things. Best story wins a Penguin Classic for their next train trip.

What’s your favourite money saving advice for train travel?

Sounds silly doesn’t it, but public transport can really save you some money – and not just because the cars at home.

The 131500.info website, which is the official website of Sydney Transport has informed us that you can now travel on Sundays for only $2.50 per person in family groups.

We suggest that this might go very well with those wanting to see Sydney on a limited budget. List the sites you want to see in Sydney and plan to see it on a nice Sydney Sunday – the family will love it.

Information from Sydney Transport website

Source: 131500.info – Transport Info

For $2.50 per person, your family can enjoy a fun day out with unlimited travel on Sydney’s buses, trains and ferries every Sunday. The ticket will even take you to Newcastle and Wollongong!

Buy your ticket from bus drivers (excluding PrePay services), CityRail stations, ferry ticket offices and authorised newsagents, 7-Elevens and convenience stores.

For some great ideas on what to do and where to go around Sydney, visit the Tourism NSW Family Funday page.

Services excluded: Light Rail, Monorail, Sydney Explorer Bus, Bondi Explorer Bus, special event buses and Private Ferry Operators. A station access fee also applies when using any of the Airport Line stations.

View the Family Funday Sunday ticket terms and conditions and the map where your ticket is valid.

A family must include at least one adult and one child (an eligible child is aged up to 15 yrs, or 16-18 yrs with a valid school travel pass or current 202 card. Children under 4 yrs travel free).