Owning a second vehicle can be a luxury for some families, while for others it's a necessity. Depending on where you live, you may not have another option to get to work or around town. However, the cost of running and maintaining your car can really add up.
With rising gas and auto insurance prices, your second vehicle may be stretching your budget. But it doesn't have to. Consider these five tips on how to afford your second vehicle.
1. Save by bundling your insurance policies.
If you have home or tenant insurance, consider using the same insurance provider for your auto insurance. Insurance companies will generally issue a multi-policy discount for your combined premiums, which could save you up to 15 percent.
You may also be eligible for a multi-vehicle discount if your first vehicle is insured under the same policy. This could save you an additional 10 to 15 percent.
2. Ask your insurance provider for discounts.
While you are on the phone with your insurance provider, don't forget to ask about further discounts. You may be able to save if you are part of an association, through alumni discounts, or if you purchased roadside assistance.
Alumni or member discounts
Your affiliation, or your spouse's, with a school, employer or union could qualify you for a discount that may save you as much as 30 percent.
Belonging to a roadside assistance program has many perks, including a chance to lower your auto insurance premiums by up to 15 percent.
Your insurance provider may offer a discount for usage-based insurance (UBI). Since this technology is relatively new, your insurer may not have offered it when you first signed up.
UBI is typically a device you can plug into your car or an app on your phone. It tracks how fast you are going, accelerating and braking, the times you are typically on the road, and the distances you travel. UBI will analyze your driving behaviour and give you a rating. A good review can save you up to 25 percent on your insurance. The best part - insurance providers can't use this information against you, so your premiums won't go up.
Winter tire discount
Your insurance provider may offer a discount for swapping to winter tires. However, this varies by province. In Ontario, insurance providers offer a discount as an incentive, while in Quebec it is mandatory to have winter tires.
3. Rethink the optional coverage on your aging vehicle.
A vehicle's value depreciates the moment it leaves the lot. In the event of an accident, your insurance provider will typically reimburse you the actual cash value of your car. This means, your aging vehicle may not have much value left in it.
Weighing the cost of your coverage with the value of the car and the chosen deductible can help determine if this option is right for you.
For example, if you have a 16-year old car that's worth about $1,000 and your deductible is set to $1,000, you won't benefit from the coverage.
4. Is it time for an upgrade?
If your car is a paperweight more often than a functioning vehicle, it may be time for an upgrade. Buying a newer car may save you hundreds if not thousands of dollars in repairs. It comes to a point where it may not be worth putting any more money into an aging vehicle.
Although insuring a new vehicle may increase your premiums, it may save you agony and money in the long run. Additionally, many new cars are stocked with high-tech safety gadgets, are more fuel-efficient, and have modes for economical driving.
5. Shop around for car insurance.
Shopping around for car insurance can help you score a better rate. If you haven't compared quotes since you bought your car, you are most likely paying more than you should.
At Kanetix.ca, we compare car insurance quotes from over 50 of Canada's top insurance providers, so you don't have to.