Consider the True Costs of Your Car
When looking to purchase a new car, most people are only concerned with the sticker price or up front costs. They judge the deal based only on the amount of money they pay before driving their new car off the dealership lot. Studies have indicated that the initial investment can be often times misleading. Over the course of several years, a seemingly inexpensive automobile can end up costing far more than a higher-priced model.
We will explain four areas that effect the overall long term cost of vehicle ownership. When you eventually decide to purchase a new model, keep these factors in mind.
Tip 1 – Fuel Efficiency
A lot of drivers would be surprised by the variance in gas expenses for different models over five years. You can save literally thousands of dollars by driving a 4 cylinder car rather than a fuel guzzling SUV. To determine how much you’ll be spending on gas, assume that you’ll be driving 12,000 miles each year. You’ll also need to make an assumption regarding where you think fuel prices will be during the next five years.
Tip 2 – Insurance Premiums
Many motorists believe that their insurance premiums are based solely upon their driving record. In truth, most insurance providers also take into account the type of car you’re driving. As an example, the premiums that your would pay on a convertible sports car are significantly higher than you would pay for a 4 door family car. Call your insurance agent prior to purchasing a new vehicle. He should be able to tell you which models will cost more to insure.
Tip 3 – Regular Maintenance And Repairs
This is one of the hidden expenses of owning an automobile. When buying a new car from a dealer, the last thing on the prospective car owners mind is the expense of future car repairs. Maintaining and repairing your car is inevitable. The older it gets, the higher the likelihood that car parts and systems will fail. The important thing to realize is that certain models are more expensive to repair than others. And while your warranty will cover the first few years, it won’t last forever. Take into account that you can save money on car repairs by utilizing used auto parts which are not only cheaper, but help save the environment
Tip 4 – Depreciation
Finally, we come to the largest expense of all: depreciation. Most people understand that automobiles depreciate. However, many people are taken a back when they learn, how much, how fast and the difference between car makes and models.
It is estimated that vehicles lose more than half their value during their first five years. Some models lose their value more quickly than others based on available inventories, popularity, and even the cash incentives offered by automakers and dealerships.
When you decide to purchase a new car, consider the initial price in the context of how much it will actually cost to own the vehicle. In other words, don’t be swayed simple because of a low sticker price. To be happy with your purchase for years to come, make sure you consider the tips and facts listed above.
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