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 Probus - Avoid hidden costs
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Avoid hidden costs

by Alexandra Middleton | 30 Oct 2013

By taking the time to crunch the numbers you may find a number of unnecessary hidden costs when it comes to the important payments.

While there’s no avoiding the cost of your car, subscriptions, or health insurance, there are ways to reduce the amount you pay.

By taking the time to crunch the numbers you may find a number of unnecessary costs hidden within the monthly or annual charge.

While the process may seem tedious, at the end of the day even a small amount saved each month makes a difference in the long-term.

Health insurance

When shopping around for health insurance a common mistake people make is to choose their policy based on the premium level alone.

While at first sight this may appear to be the cheapest option, often these policies cover the worst-case scenarios, rather than the types of cover you will actually need. Take the time to think about what medical services you are likely to make use of, now and into the future.

Likewise, when choosing a policy, take into account whether any prescription medication you take is covered within the policy. Read the fine print closely and look out for hidden costs such as limitations on the number of times you can claim back on a particular service.

Be sure to review your chosen policy regularly to ensure you are not paying for cover you no longer need, such as pregnancy and obstetrics.

To avoid a situation where you have an affordable policy that covers none of your needs, consider investing in a tailor-made policy.

From another perspective you may, in fact, be paying unnecessary costs by not having private health insurance.

Any Australian who earns over $88,000 per year and does not have an eligible policy is required to pay a health care tax. Often this tax can turn out to be more than the cost of a policy, so do your research.

Car expenses

Along with the obvious costs of running a car, such as fuel, there are others that arise that are not so simple to gauge.

First and foremost the greatest cost to a car owner is the depreciation of the vehicle, which begins the moment the car drives out of the lot.

Taking into consideration the fuel economy rating of the car you choose is another way to avoid escalating and unexpected costs.

As is the way you choose to finance your car. When it comes to financing, choosing the right mix of upfront payment, length of the loan and the interest rate, can bring considerable savings. The best combination is to make a considerable down payment, spread your repayments over a longer period of time and secure a low interest rate.

Lastly, when it comes to maintenance of your vehicle, take the initiative to understand the condition it’s in. When putting the car in for service, don’t be afraid to ask your mechanic questions so you understand why each repair is necessary. By simply saying yes to every repair you may find yourself footing an exorbitant bill, when things could have safely been postponed until a future service. Ask about additional extras such as a car wash and vacuum before handing over the keys.

Subscriptions and downloads

The issue with subscriptions and downloads is not so much that people are unaware of how much they cost, but that it is easy to lose track of the payments. It takes a matter of seconds to subscribe to a magazine or service, or purchase an app, a decision, which often locks you into more than 12 months of automatic deductions.

Without having to consciously think about paying for these services it’s easy for them to build up, with deductions continuing long after you have grown bored of the subscription or application.

Keep a list of what you have subscribed to and if you find you are only using your apps a handful of times, look around for free equivalents, because usually they are out there.