Blogging Away Debt Blogging Away Debt follows real people on their journey to debt freedom — with tips on the debt snowball, budgeting, cutting expenses, and staying motivated.

by Tricia

When I ran the numbers for 2006, I was a bit surprised to see that our car cost over $2,000 to own. Granted, a big part of that went towards fuel ($649).

The accessories for the car ran $100. This amount includes the car registration costs as well as things like air fresheners. Also, for some reason I put driver’s license renewal fees in there. I expect that this expense will be less next year because our drivers licenses are good for a few more years. I also plan on letting the car stink if it stinks 😛 No more air fresheners for a while 🙂

We currently have breakdown insurance through AAA. That runs $48/year and at this time I am paid up through September of 2007. I will have to consider cutting this cost if our money situation isn’t better by then. But I think it will be.

Our fuel costs are fairly low. Our car is very fuel efficient (30-40 mpg) and I am thankful we ended up buying such a frugal car. Really, though, we won’t be using our car as much now with my husband not working. So, our fuel costs should go down overall.

Our insurance on the car took the biggest chunk. We currenly pay $99/month on a monthly payment plan. Our deductible for this full coverage plan is set at $500, but there is a clause where we do not pay the deductible if the accident is not our fault. I have called my insurance company to see about lowering my rates. My car is only worth around $5,000 now, so it seems like I should be able to get it lower.

If I raised my collision coverage deductible to $1,000, I would save $6.00/month. If I also raised the comprehensive coverage deductible to $1,000, I would save an additional $7.83/month. So I could save $13.83/month just by raising the deductibles to the highest I can go. That’s not a lot.

I then asked about taking off the collision and comprehensive coverage from the car. If I did that we would save $61/month. That was more like it. That would be a nice amount to save per month. But it has a price.

Since our car is still worth around $5,000, we would like to keep full coverage on it for now. With winter being here, our roads are now constantly snow-covered (except for a few main highways). It’s probably best to have the coverage right now. Once the snow melts in April or May, we will think about taking off the full coverage.

There is a little bit of money we can cut from here immediately. Longer term, there could be more if we cut the full coverage insurance and the AAA insurance. It seems ironic that we just obtained health insurance and now we’re thinking about getting rid of auto insurance. If it was up to me I’d keep all of the insurance to protect what we have.

Another option I have is to shop around for a different auto insurance policy. That’s hard to do because the company we have now has been great in terms of service and they were the best price around when our car was newer. It doesn’t hurt to shop around, though.

Next expense to review….FOOD.