The past few years have been wrought with rampant inflation, and many Americans are having a hard time paying their bills.
In a February CBS News and YouGov poll, 77% of Americans said their income isn’t keeping up with inflation. And a March survey from Equitable found that 80% of Americans across all income levels are worried about rising living costs.
Life can be especially challenging for young adults who are just starting their careers and craving independence. Suddenly, the burden is on you to pay for every little expense. And what if you realize you can’t afford everything you need?
Imagine you’re 22 years old and you’re ready to move out of your parents’ house, but you’ve done the math and discovered you can’t afford a place of your own. One of the reasons is your car payments eat up too much of your income — but you need wheels to get to work every day.
So, what can you do to lower your auto costs? And can you do anything to lower your living costs as well?
A number of things may be contributing to high transportation costs at that age. Let’s focus on your auto loan and car insurance.
Insurance premiums tend to be higher for less-experienced drivers, as they’re deemed more likely to get into accidents. Companies can also assess risk based on a car’s make, model and safety features. A high-end car that’s expensive to repair or a car with a high theft rate result in higher premiums.
If you want to try cutting down on your insurance bill, you can start by collecting quotes from multiple companies and select the best deal. Don’t be afraid to negotiate, either, especially if you have a good driving record thus far. Ask if there are any further options for lowering your monthly payments.
As for your car loan, even as borrowing rates remain elevated, you may be able to refinance for a better deal if your credit score has improved since you bought the vehicle. What kind of car do you have? If it’s new or expensive, you may want to consider swapping it with a cheaper option.
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