I’m an Average Middle Class Retiree: 7 Ways to Cut the Costs of Running a Used Car

When it comes to saving money in retirement, Therese R. has it down to an art form. While still living comfortably, the 67-year-old retiree keeps a close eye on her spending to make her savings last – starting with keeping car costs as low as possible. Driving a used vehicle, Therese has found clever ways to cut costs at every turn.

Here are ways the average middle-class retiree cuts costs by driving a used car.

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Never pay the sticker price

“The first rule is to never pay sticker price when you buy a used car from a dealer,” Therese said. “Take the listed price with a large grain of salt and get ready to play hardball.”

She suggests checking price guides for the model’s market value before negotiating and being ready to walk away to get a fair price. On her last used car purchase in 2019, Therese said she knocked $4,000 off the original asking price.

Buy used cars that are 2-3 years old

Therese has found the sweet spot for value in buying two to three year old used cars from dealerships. “You save a ton to buy new, but it’s not so old that you’re at great risk of endless repairs,” she said. “Savings on new purchase can be 40%-50%.

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So routine service for yourself

To keep maintenance costs down over the years of ownership, the hands-on retiree takes a DIY approach to oil changes, fluid refills, air filters and other basic services.

“I have good tools and I do absolutely everything myself that doesn’t require a lift or a lot of strength,” she said. “These small service costs can really add up over time.”

Take advantage of senior discounts

At parts stores and some service centers, Therese said her senior citizen status helps her get valuable discounts on auto parts and labor costs.

“It’s always worth asking if they offer any premiums or discounts. Many will knock 10%-15% off for people my age, which can add up to a bigger repair job,” she said.

Maintain a high credit score

One of the most important ways Therese keeps her car costs down is by maintaining a high credit score through responsible borrowing. This allows her to qualify for low interest rates when financing her used vehicle purchase.

“I had an 820 credit score the last time I bought, which allowed me to get a 3% interest rate on my auto loan,” she said. “Over the life of a four-year loan, that probably saved me over $1,000 compared to a higher rate.”

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Only Finance for 3 years Max

While many buyers take out five- to six-year loans, Therese said she strictly limits her financing terms to a maximum of three years to avoid excessive interest costs.

“The longer you finance a used car, the more you pay in total interest charges,” she said. “Limiting it to three years keeps costs reasonable and prevents upside down on the loan due to amortization.”

Use cashback apps and gas rewards

Finally, Therese squeezes additional savings into her used vehicle operating costs through cash back apps like Upside and Checkout 51. She also makes sure to use grocery store rewards programs to save 0.20-0 .40 dollars per gallon at the gas fill.

“It takes a little extra effort to claim cash back offers and collect gas rewards,” she said. “But it could easily save me $300 a year just to stay on top of it.”

Through diligent cost control measures, Therese is able to keep her vehicle expenses down to $2,500-$3,000 per year. These savings help her retirement income last longer, leaving more for travel, hobbies and ensuring she never runs out of money down the road.

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This article originally appeared on GOBankingRates.com: I’m an Average Middle Class Retiree: 7 Ways to Cut Your Used Car Driving Costs