Top 10 Money Mistakes New Families Make

Not Getting the Most Mileage from Your Car

This is a mistake you should correct in the most literal way: Purchase a vehicle with the best gas mileage you can find. Doing the math makes the case. Say you upgrade from a car that gets 20 miles per gallon to one that gets 26; if gas costs $2 a gallon, you'll be saving $2 every 20 miles, or nearly $450 annually, assuming your car is driven 15,000 miles a year (the average in the United States, according to Edmunds.com, an Internet site devoted to car maintenance). And there's no need to pay 20 cents a gallon more for premium gasoline, unless your owner's manual calls for it (a requirement of only a few high-end models); indeed, most cars today are designed to run on regular.

What will make a big difference in your car's fuel efficiency is routine maintenance. Brakes that rub gobble up extra fuel, and so does driving on tires that are not properly inflated. Above all, be vigilant about changing the oil. "The most important fluid in your car is that dark, syrupy liquid that lubricates your engine," says Don Earnest, editor of Penny Pincher's Almanac (Reader's Digest, 2003), who advocates a firm, inflexible rule of an oil change every 3,000 miles. Treating your car well is not cheap, of course, but in the long run it saves you money because it extends the life of your car.

And, incidentally, if you're financing a car, whether new or used, shop around for the best deal. Many car buyers still get their loans from the dealership. But in fact, according to a report issued in January 2004 by the Consumer Federation of America (CFA), dealers' finance departments routinely mark up their rates and fail to disclose this fact to the consumer.

"These hidden finance kickbacks typically add at least $1,000 to the cost of an auto loan," warns Stephen Brobeck, executive director of CFA, who estimates that the practice affects about 1 in 4 buyers who finance through dealers. You're better off approaching lenders directly for the best rate -- preferably before you walk onto the lot. This will put you in the best position to negotiate.

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