We’re all well aware of the fact that buying a new car is expensive. We log onto dealer websites and cringe at the costs of even smaller, used vehicles. But for some of us, a car is essential and we have to bite the bullet and pay the price.
Unfortunately, when it comes to buying cars, many people land themselves in financial trouble due to poor planning. When budgeting for car expenses, people often neglect to account for costs other than the price tag on the vehicle itself, when in reality there are many other factors to account for. Here are some car-ownership costs you need to remember.
Repairs
First of all, you have to be prepared if something goes wrong and certain parts need fixing or replacing. New cars often come with a warranty that protects you and covers you for damage like this. You could also purchase an extension, such as a Chrysler extended warranty or whichever brand of car you own, to ensure protection for longer.
However, if your car is out of warranty, you’ll want to have some cash saved for in case of an emergency.
Routine Maintenance
You must take your car in for a service once a year. This might seem like a major expense when nothing is wrong with the vehicle, but keeping up with routine maintenance is in your best interests.
Failure to do so could lead to parts becoming damaged and causing bigger, more expensive problems than what your service would have cost you.
Fuel
Of course, your vehicle isn’t going anywhere without fuel, which can be expensive. You can still combat this by making an effort to reduce your fuel consumption, but you’ll need to factor it into your budget either way.
Consider your typical driving habits and allocate an amount to cover your fuel in your monthly budget.
Registration and title fees
When purchasing a car, there are a few fees that you should account for. The first is the registration fee, which can vary depending on your state. The second is the title fee, which covers the administrative costs of transferring ownership of the car.
These fees can add up, so it’s important to be aware of them when budgeting for your purchase. Keep in mind that these are just the two most common fees – there may be others depending on your state and the car you’re buying. By being aware of all the associated costs, you can make sure you’re getting a good deal on your new vehicle.
Sales tax
When buying a car, there are many factors to consider. One important deciding factor is the sales tax. In some states, the tax on cars is significantly higher than in others. For example, in Wyoming, the sales tax on cars is 3%, while in California, it’s 7.5%.
The amount of tax you pay on a car can add up quickly. In California, for example, if you buy a $30,000 car, you’ll pay an additional $2,250 in sales tax. That’s a lot of money to fork over!
Before buying a car, be sure to research the sales tax rates in your state. This will help you decide which car is the best deal for you.
