You’re in the market for a new car, and you probably have a good idea of what make you want. Perhaps even the model. You’ve done your due diligence and briefly scanned the nearby dealerships for the best local car deals. Right now, you’re probably assessing whether or not you want to go with a new or used automobile. And though you certainly have a good idea on what you can actually spend, the question is, are you budgeting in all the required fees and ongoing expenses associated with buying a new car? If you are like most people shopping for a vehicle, probably not. But worry not, Best Car Deals Now is here to help.
When you take the time to stop and think about it, there are numerous costs related to your purchase – some upfront, and some related to the necessary sustainability of simply owning or leasing a vehicle. What follows are the 5 important purchasing and operating expenditures, according to Kelly Blue Book, that are often overlooked…but still affect your overhead.
- Fuel
Let’s start with the most obvious one. Gas prices are currently soaring higher than they’ve been in years. This can clearly make an impact on your wallet. According to AAA, the national average is hovering around $2.75 per gallon, with West Coast states like Hawaii, California, Washington, and Alaska rising well above the $3.00 mark. States on the East Coast like Pennsylvania and Connecticut aren’t very far behind either. But wherever you may live, carefully consider your weekly travel time, work commute, and gas efficiency when budgeting for a new car. When it comes to calculating miles per gallon, bigger is usually not better. Hybrids and electric cars are.
- Financing
Like most things on this list, there are many variables to consider when trying to secure financing for your car. With annual percentage rates ranging from 3% all the way up to 10% – and beyond for those with low credit scores – it is often best to lock down your auto loan before you even start shopping. Factors such as length of the loan (60 months is usually the standard) and how old the car can also play a role in determining your monthly payment.
- Fees
Guess what else varies from state to state and dealer to dealer? Fees! Sometimes lots of fees. We’ve mentioned this once before, but be sure to avoid unnecessary add-ons. The list price, taxes, and registration should usually be the only items you should see on your purchase ledger, unless otherwise requested. However, each dealership may also charge you a documentation fee if it is not already included in the sticker price. Itemized curiosities such as these are always encouraged when calculating the true cost of your new car.
- Insurance
Surprise! Car insurance premiums fluctuate by state and make of course, and usually the more remote locations that have less traffic – and thus less accidents – get the best insurance deals. So if you live in Maine or Idaho, you probably don’t need to worry much about your monthly car insurance bill. This holds true in highly competitive markets like Ohio too. But whether you are leasing a new car or buying a used one, always be sure to factor in the make, model, your driving record, and credit history. Keep in mind that a car from a safety-first company like Jeep or Subaru that is loaded with plenty of security features will only drive your premium down – and keep your spirits up.
- Maintenance & Repairs
On the surface, these two items may seem rather similar, but when calculating the true cost of your new vehicle, they could not be more different. Routine maintenance can be easily estimated, as you know you’ll have to change your oil every 5-10k miles, rotate your tires around the same time, and get new brake pads after about 50k miles, etc. You can even factor in car washes if so you choose. But repairs are trickier. Not even The Amazing Kreskin can predict when your car might need a new muffler or that battery will no longer take a charge. Give thought to these residual expenses, along with the age, wear, and tear on your new car, to gain a better understanding of what your costs will be down the road.
Just remember: There is always more to the cost of owning a car than just manufacturer’s suggested retail price (MSRP). The dealerships, banks, insurance companies, repair shops, Uncle Sam, and BIG OIL will always want their cut too. So whether you are buying a first car your teenager or you’re personally shopping for your first car in years, always calculate the true cost of your new vehicle – first.