So you have had enough of your old banger, and it is throwing up problems left, right, and center. The good news is that you can upgrade, but you will have to be careful not to stretch further than your budget allows you to. While the purchase price is the first thing you check, there are other costs associated with the decision that you have to pay attention to. Find out more below.
Cost of Running
First of all, you will have to check the cost of running for the car. How expensive are the parts for your car make and model, and what is the fuel consumption for city and highway traffic? You will be surprised how many people buy the wrong car because they don’t check the EPG figures. If you tend to drive in peak city traffic, you might be better off with a small petrol engine. If you cover long distances, a larger diesel will get you more miles per gallon/
Credit Charges
In case you are planning on taking out credit for the car, you will have to work out the total cost before you sign the dotted line. Hire purchase agreements are generally much cheaper, and you might end up paying double the price, if you are not bothered to read the small print. Add up the admin fees and credit charges, and find out whether or not the car is worth the total amount.
Insurance
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Some cars are cheaper to insure than others. However, your driving record, your age, and even your location and driving habits will influence the quote. It is recommended that you get an insurance quote from multiple companies, so you can compare the level of protection and the excess amount before you commit to buying the vehicle.
Tax
No matter how old your car is, you will need to pay tax on your purchase and to keep it on the road. Generally, the more expensive the car is, the more tax you will pay, but the rules change from one state to another. If you want to save money on your car long term, you will have to work out how much the tax and insurance will cost you per year.
Depreciation
If there is one aspect of buying a car people ignore most often, it is the price depreciation, If you buy a car brand new, you will immediately lose hundreds of dollars once you drive it home. While the price drop with used cars is not as drastic, it still exists. Therefore, if you are paying for your car for a couple of years, you might end up a lot of money, just because the resale value of the vehicle has gone down significantly. There are some websites that will tell you the approximate value of your car a few years from now, so you can plan your finances ahead.
Buying a car has more to do with long term financial planning than just comparing dealer prices. Follow the above guide and you will get the best value for your money.