There’s more to buying a car than the asking price. Be informed and budget for the lesser-known, long-term costs.
If you are currently shopping for car, here are some of the less obvious costs associated with buying and owning car. Being mindful of some of these factors can help you with your financial planning.
When buying a brand new car, its value will begin to depreciate the moment you drive it off the lot and by the end of the year will have lost around 40% of its value. Used cars will depreciate less quickly, with some cars depreciating more than others, so be sure to try a Car Depreciation Calculator. Your next car’s resale value should definitely be top of mind, so be sure to factor the costs for regular upkeep (fluid changes, tire rotation), interior/exterior cleaning and body repairs (if necessary).
Maintenance and Upkeep
Unexpected maintenance costs are some of the most expensive and challenging costs of car ownership. These costs tend to be large and come up when you are least prepared for them. The best way to avoid large expenditures on car August 14, 2015 maintenance costs is to routinely take your car in for maintenance, so check out this basic maintenance schedule for some general guidelines. The more frequent cost might seem overwhelming, but if you are planning on keeping your car for the foreseeable future, regular upkeep can help you avoid some avoidable repair bills.
Although you can’t control the cost of fuel at the pump, you can find the best prices for gas near you. Newer cars are typically more fuel efficient — particularly if you purchase a hybrid — but the major consideration for fuel consumption is the relative amount of driving performed on the highway versus the city. So be mindful of your commute and make conservative estimates about the cost of gas.
Car insurance rates depend on a wide range of factors — everything from your age, gender, driving history and geographical location can affect your rate. One key factor is the type of car you drive, as certain cars have higher frequencies of theft and claims, which increases the cost to insure them. But when it comes time to select an insurance policy, make sure to shop around for the best rate. Sometimes they vary significantly!
To some, this may seem a little silly — but parking costs can really add up! Overall, your cost is based entirely on where you live or where you’re commuting to, but be sure to make parking a consideration within your monthly financial budget.
The Bottom Line
Owning a car can be a joy — the freedom and privilege to travel wherever and whenever you want is something everybody can appreciate. Just remember: the costs associated with car ownership are manageable if you plan ahead and budget for some of the lesser-known costs.