How to Cut Your Costs with Two Auto Loans

Driving off the lot with your new ride is an empowering feeling. Sunroof open. Speaker system blaring. Shiny new vehicle cruising down the highway. It feels great until your bills suddenly cost more. How can you save some money when you are paying toward two auto loans?

Before we look at some ways to cut your costs, consider the necessity of having two vehicles. Can you get by with only one car? If you are struggling to make ends meet since you are paying for two cars, but you are single and don’t need a second car, I suggest you stick to just one car for now. You could be like me and work a 9-5 with a spouse who starts work five hours later than me – and we work in opposite directions from our house. Going down to one car just doesn’t cut it for us. If your situation sounds like mine, these tips can help.

Here are five ways to cut your costs while paying for two auto loans.

1. Consider refinancing your auto loans. Since you got approved for a second auto loan, it’s likely that your credit score has improved since when you took out your last one. If that’s the case, you can refinance your auto loan at a lower interest rate. You can save money monthly up front if your payment stays the same. With a lower interest rate, more of your money is going toward the principle and not the interest. This enables you to pay off your first loan faster. If you want to simply pay less each month, that’s an option too. You can keep paying the same amount toward the balance but less toward the interest each month because of your improved credit score. You can use this extra money toward your insurance bill, gas, or other car expenses. 
2. Talk to your insurance. Many car insurance companies offer discounts when you have more than one vehicle in a plan with them. Some companies offer discounts for automatic payments or when you receive your statements digitally. If you want to save more money over time, look at the monthly rate versus the 6-month payment option. Often, if you pay for 6 months of coverage at once, you save more in the long run. If you’re a safe driver, see if your insurance company has a plan like Drive Safe & Save from State Farm. With this program, you connect your car to their app which monitors your driving. Making note of sudden lane departures, slamming on breaks, and speeding, the safe driving you do in your car brings your monthly payment down.
3. Carpool when you can. Even though you are making two car payments, you can save money by carpooling. If you and your partner drive the same direction to work around the same time, you can save on gas and wear and tear by carpooling. Alternate which vehicle you drive so you can evenly spread the usage of the vehicles. Drive your sedan on Mondays through Wednesdays and your SUV Thursdays and Fridays. If you live near a trusted coworker, take turns driving each week. You’ll be surprised how much you can save on gas and car maintenance.
4. Do your own car maintenance. While it might be more convenient to take your car to a body shop for maintenance, the costs quickly add up. This is especially true now that you are paying toward two auto loans at the same time. Doing some work on your own car can be easier than you think. Projects like changing the oil, rotating the tires, and replacing a serpentine belt can be completed in only a few hours and are made even easier with the help of YouTube tutorials. You might need to purchase a few materials up front, but these can be reused when you are due for maintenance again.
5. Rethink your next gas station visit. Instead of going to the gas station closest to you, there is likely another gas station nearby with a lower price. Many gas stations or third- party cash-back apps like Upside offer discounts for fueling at certain locations. Taking advantage of these promotions add up over time and can quickly lead to a full tank of gas when you are on the road often. Need a carwash? Save a few dollars (or $20) and take your car back home and wash it yourself. Much like with car maintenance, you will have to purchase a few supplies to get started but fortunately, these can be reused for your next several washes.

You’re doing great! Remember Alltru is here to help with all your financial needs. If you’re ready to refinance a car payment or ready to purchase your second vehicle, we’ll walk – or drive – through the process with you.