29 October 2012

Keeping on top of car costs

When times get tough, the car keeps going – hopefully.

“Our clients often cross their fingers and hope their car makes it through a Warrant of Fitness, rather than having it serviced regularly,” said Raewyn Fox, CEO of the New Zealand Federation of Family Budgeting Services.

“This doesn’t usually work. If a vehicle isn’t serviced regularly, there’s a greater chance more expensive work will need to be done. It’s a bit like going to the dentist: a checkup might cost you something, and some minor work may be needed. It hurts the budget. But leave it for years and when you next go, it will totally blow the budget,” Fox said. “And if you never go, well, eventually something will give out completely.”

“If you have a vehicle, you need to budget for petrol, regular maintenance, warrants of fitness, registration and insurance. If your budget doesn’t stretch this far,” Fox said, “you need to be really honest with yourself about whether you can afford that car.”

The AA agrees. “In times of financial hardship, people tend to ignore car maintenance, however, this is just the time when maintenance is more important as the vehicle will usually be required to last longer until it is upgraded,” said Andrew Bayliss, Motoring Advice Manager at the AA. “Keeping on top of scheduled oil changes, changing the coolant and brake fluid regularly and ensuring safety items such as tyres and brakes are up to scratch will ensure the car lasts longer, is safe to operate and will hold its value better.”

Fox said the easiest way to budget for your vehicle costs is to prepare a cashflow forecast. “A cashflow lets you see when your bills are due, and how much money will be in the bank at that particular time. It’s important that you budget to create a surplus which can be set aside for bills. It takes some self control not to touch the money in your bank account, which is why a cashflow is so important: it shows that the money is actually tagged for another purpose.”

“A budget adviser can help you set your budget and prepare a cashflow forecast,” Fox said.

The New Zealand Federation of Family Budgeting Services is a network of community budgeting services offering free, confidential, non-judgemental budgeting advice. Find a free budget adviser on www.familybudgeting.org.nz or by calling 0508 BUDGETLINE (283 438).

Top five reasons for keeping on top of vehicle maintenance:

1. Dirty oil doesn’t lubricate as it is intended to and can become affected by contaminants, essentially becoming abrasive and causing rapid engine wear. This also applies to transmission oil. An oil and filter change doesn’t cost much.

2. Coolant changes are relatively inexpensive, but one of the biggest causes of engine failure is neglecting the cooling system. On an older, low value vehicle, an overheated engine will often make the vehicle too expensive to repair.

3. Brake fluid is also relatively cheap, but it is hydroscopic, meaning it retains moisture from the air. Therefore, old brake fluid can boil when braking hard, causing serious braking problems. Also, due to the high water content, it can corrode the brake components, resulting in expensive repairs.

4. Many cars have cambelts instead of timing chains to drive the camshaft. Most manufacturers recommend replacing the cambelt every 100,000km or 5 years (whichever comes first). It pays to stick to this recommendation, as a broken cambelt will usually destroy an engine. Unfortunately a replacement cambelt is quite an expensive job, and usually includes a replacement water pump.

5. Many safety items will be picked up at WOF inspection time – although checking tyre condition and pressures, ensuring wiper rubbers are in good order and lights are operating correctly are all things any driver can do.

ENDS

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