Transportation Cost

Transportation cost is the second highest cost in your retirement budget.

Your automobile (car, truck, minivan, etc.) is your second most expensive possession  after your home so you need to take care of it in order to keep your costs down.  This is easy to do if you read and follow your owner' manual.

Cost detail for our model retired couple follows:

Transportation Cost Percent of Transportation Cost
Vehicle purchases (net outlay) 29.48%
Cars and trucks, new 16.43%
Cars and trucks, used 12.22%
Other vehicles 0.81%
Gasoline and motor oil 30.85%
Other vehicle expenses 32.26%
Vehicle finance charges 2.62%
Maintenance and repairs 10.35%
Vehicle insurance 13.13%
Vehicle rental, leases, licenses, and other charges 6.15%
Public transportation 7.41%
Total 100%

Vehicle Purchases

There are many ways to lower the cost of your vehicle purchases which is the largest component of transportation cost.

If you buy a good used car, you can save a considerable amount on the total cost of your car.

If you buy a new car, don't get emotionally involved and fall in love with the car.  This is what car salesmen love.  Don't get in a hurry and watch for deals and rebates.

Learn the best times to purchase a new car:

  • Day of the week- Saturday
  • Month - December
  • Time of the month - end of the month
  • Best days of the year - December 24 and 31

Finance charges are another cost associated with purchasing an auto.  If possible, save for the purchase of your next car during the time you are driving your current car.  If your car is paid off and you are not paying car payments, start a "car fund".  Each month put an amount in the car fund approximately equal to a car payment.  This savings account will pay you interest and help build your car fund so you can buy your next car for cash.  That way, you pay yourself the interest instead of paying the interest to the bank or finance company.

Read how others reduce their transportation cost and tell us your savings story.

Gasoline Cost

Where we live, the lowest cost gasoline is at our Walmart.  If you get a credit card from Walmart, you get five cents off per gallon when you purchase gas from the Walmart gas station.  Sometimes Walmart offers up to $.15 off per gallon.  I expect that if you check around your own  community, you will find the best way to consistently purchase the lowest priced gasoline.

Some credit cards give a percentage discount on gasoline purchased with the card.  I have a card from USAA that gives a three percent discount.  However, the total annual discount is limited to $150.00.  Other cards may not have this annual limit.  Do your research and I am sure you can find a card to help you lower your fuel cost.  Just remember to pay off the balance each month so you do not save on fuel cost and get killed on card interest charges.

Check your owners manual to see if regular gasoline is approved for your auto and if so, don't pay the extra for the higher grades of gas.

Drive at the speed limit or slower.  This will save you money on gasoline since your car uses less gasoline per mile as you reduce your speed.  Also, you will not have to pay that expensive fine if you are caught speeding.  A traffic ticket will have a negative impact on your transportation costs and will possibly raise your insurance costs.

Read how others reduce their transportation cost and tell us your savings story.


If you maintain your car in top condition, you will lower your operating costs and extend the life of your car.  You win on both counts.  Pay to maintain your car now or pay more later in repair bills and having to buy a replacement car before you realize the full value from your current car.

Linda and I usually drive our automobiles for about ten years.  If you take three to five years to pay for a car, why not drive it with no payments for several years while you save money to buy its replacement.  My current car is a 2002 Chevrolet Tahoe with 158,000 miles.  It still runs great and does not require any significant maintenance.

My previous two vehicles were Chevrolet Suburbans.  These are well built autos and I drove each of them over 200,000 miles.  They did not require any really major maintenance since I maintained them properly.

I keep a maintenance log of all maintenance that is performed on my car.  Any small record book will do.  My book is a 4.5 X 3.25 inch composition book I bought at Walmart.  Here is a sample page.

Maintenance Log Book

Explanation of what is on the page

O & F means oil and filter change

Purchased General Grabber Tires

Had brakes checked (50% left) and front end checked

Topped off differential fluid

Checked wheel hubs


Every 5,000 miles, I change the oil myself.  I pour the old oil in plastic gallon milk jugs and take it to Stop and Lube, the local oil change shop that accepts oil for recycling.  The cost of an oil filter and six quarts of oil is much less than paying someone else to change my oil. 

After I change my oil, I take my car to my tire store and have them rotate my tires (every  5,000 miles).  This will significantly extend the life of your tires.  When you  buy a new set of tires, buy them from a store that offers free tire rotation for the life of the tires. Then remember to take advantage of the rotation service by synchronizing the tire rotation with the oil change.

Both these simple maintenance jobs will keep your transportation costs down.


Insurance is a big part of your transportation cost so shop around for your car insurance.

Sometimes we establish a long term relationship with an insurance agent, and I am all in favor of those relationships.  However, it pays to keep the relationship "honest".  If you do not comparison shop to see if you are paying a reasonable amount for your insurance, your agent may not be treating you as well as you think.

If you find that you are paying above market rate for your insurance, discuss it with your agent.  If you do not question your costs, no one else will.

There are several website that provide comparative quotes.  A popular one is Progressive at

Linda and I are fortunate to be insured with USAA.  USAA is a cooperative non-profit insurance company so the costs are lower than a for-profit insurance company.  We also receive a refund at the end of the year depending on how USAA did during the year.  USAA insures people who serve or served in the United States military services.

Consider raising your deductibles.  You will pay a higher premium each year for a lower deductible.  If you raise your deductible and do not have an accident for a few years, you will come out ahead.  Ask your insurance agent to help you evaluate your options.

Drop collision insurance on older cars.  There is no need to insure your car for more than it is worth.  Go to the Kelly Blue Book website to see what the used car value is for your vehicle.  Don't pay for collision insurance on an old clunker.

Public Transportation

I do not live in an area of the country that has public transportation so I am not qualified to dispense advice about how seniors can reduce public transportation cost.  If you use public transportation, please share how you reduce your public transportation costs and tell your story at the end of this page.  Thank you in advance for your help.

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Saving on Car Expenses 
I notice you have had 2 SUV's as vehicles in the past. These are fine for hauling and going through snow, but they are very fuel inefficient. I personally …

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