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There's more to buying a car than buying a car. What we mean is, the price of a
vehicle is not the only thing to take into consideration. There's a lot that goes
into the total cost of owning a car, and these other things need to be factored
into your budget. The total cost of owning a car is the amount paid to
purchase a car plus the cost of operating and
maintaining a car. Here's a list of some other things to
consider besides the initial cost of a car.
Gas
The cost of gasoline is high, and it's probably going to go
higher. So gas mileage needs to be taken into consideration. The monthly payment
may be affordable, but if it's a "gass guzzler", you may spend a lot more per month
on gas than a car of similar price with better gas mileage.
Let’s say gas is $2.25 per gallon and you are comparing two cars. One car,
car A, gets 15 miles per gallon and the other one, car B, gets 25 miles per gallon.
The average person drives about 15,000 mile per year. That means car A will cost
$2,250 per year in gas. Car B will cost $1350 per year in gas. So car B
will cost $900 a year less than car A, and will save you $75 every month. Just think
of how this could ease your monthly budget! You could even use it towards the
monthly payment on your car. Of course, if car B that saved you $75 per month on
gas was more expensive at the showroom, those monthly savings on gas may be of no use
to your budget.
Also, keep in mind the type of gas you car may require. Some cars specifically
state that they can only use premium octane, which is about 20 cents more per gallon.
20 cents may not sound like a lot, but in the end it really adds up to big bucks!
Insurance
The type of car you purchase will have an
impact on how much your car insurance will cost. The cost of insurance
(called the "premium") on a new car is usually higher than on a used car because
if you buy a new car you are required to carry full coverage on your car.
Full coverage means the insurance company will pay for damages in an accident,
even if it was your fault. However, if you buy a used car you have the
option of carrying liability only which is less expensive than full coverage.
Liability only insurance means that the insurance company will pay for damages
only if it wasn't your fault.
Insurance premiums depend on the make and model of the
car. In general, sport cars, SUVs, and trucks tend to be more expensive
than a four door sedan. Of course, your age, marital status, gender, location, and
driving history also play a role in your premium costs.
Contact your insurance company with different types of cars you are shopping
for, and ask them to give you insurance quotes for each one. This helps to make
a decision on what to buy, and helps you know how much to budget for insurance.
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Maintenance
The cost of keeping your car running well is always a
big part of the cost of ownership. Most repairs will be covered under the warranty
with a new car, and standard warranties usually last for about three years.
But be careful; there may be costly, regular maintenance you may be
responsible for in order to keep the warranty from becoming void (in other words,
to keep the warranty active).
A used car may have a warranty, or it may not. In general, you should plan to
spend more on maintenance when buying a used car. Repairs and general upkeep of
a used car are likely to be more frequently with used cars. This means the
cost of owning a used car may be more than a new car, in terms of maintenance
cost.
The type of car may also have an impact on how much repairs will cost.
Some of the high-end European and Japanese made cars are more expensive in parts
and labor. On the other hand, they may be higher quality and require less
repairs.
Depreciation
How much and how fast a car loses its value is something
you may want to consider when buying a car. A new car is guaranteed to
depreciate once you drive it off the car lot. But some cars depreciate faster
than others. Some models such as Honda Accords, Lexus, and Mercedes Benz hold
their value more than other models such as the Ford Taurus, Jeep Grand Cherokee,
Ford Explorer, Lincoln Continental, or Infiniti Q45. You may want to do some
research on a car that you want to purchase in order to find out how
quickly it depreciates. But depreciation may or may not be important to you.
It depends on your needs. If you plan to trade the car in a few years as part
of the purchase of a new car, depreciation is definitely an important factor.
Other expenses
in purchasing a car are the tax and tags on the
car, which is a yearly expense. These tend to cost more on newer cars
depending on the state.
Final note
It is extremely important for you to consider everything when purchasing a
car. Gas mileage, cost of insurance, maintenance costs, repair costs, and
depreciation are all things that could have the potential of making a seemingly
affordable car unaffordable in the end. Try to do as mush research as you can
before purchasing. Bottom line: know what you are getting into when you buy your
car.
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