Buying a car can be exciting, especially if you are buying your first vehicle. However, it is essential to plan your finances properly as a car can considerably change your budget.
When you think of purchasing a vehicle, you may be tempted to only think of the buying price of the car. This doesn’t present a proper picture of the cost of owning the vehicle as you still have to factor in several other car costs. Let’s look at some of them.
Once you buy a car, you will regularly need to purchase fuel. Gas prices fluctuate depending on the state of the economy, so it may be difficult to plan your fuel budget months in advance.
However, you can always determine the fuel economy of the vehicle you intend to buy. With this information, you should be able to determine how much fuel you would need to purchase every month, and this will give you an estimate of the true cost of owning the car. The fuel consumption of your vehicle will vary depending on your driving habits, so you should take this into consideration when calculating the fuel consumption of the car.
You might save money on fuel by purchasing a hybrid or electric car, but remember that these vehicles will usually cost a lot more money upfront.
2. Car Insurance
Car insurance is legally required if you want to drive your car around. With an insurance plan, the insurer will cover the costs of repairing your car in case of an accident. You should note that accidents can happen even to the best drivers, so you should get adequate coverage before getting your vehicle on the road.
The cost of car insurance is determined by many factors. These include your claims history, the distance you cover annually, your age, and even your gender.
3. Extended Car Warranties
You may also be wondering, ‘Are extended car warranties worth it?’ Unlike standard car warranties, extended warranties are optional. They can come in handy if your car needs an expensive repair as they cover some or all the repair costs.
Extended warranties are also meant to cover anything that won’t be paid for by the original factory warranty. With expensive luxury cars, you can save thousands of dollars by taking out an extended auto warranty.
You will also need to spend money on the maintenance of your vehicle. The costs will vary depending on the model of the vehicle and its age. With a new car, you can expect to spend about $500 annually on the maintenance of the vehicle, and this cost will rise to an average of $1500 when you hit the ten-year mark.
It is also worth noting that the vehicle may break down unexpectedly or need other repairs. For example, you may hit an animal or scratch the paint off the car, and this will force you to pay a large amount of money for the repairs.
Before you buy your next car, you should consider the extra costs of owning the vehicle. Some of the biggest costs are fuel, maintenance, car insurance, and extended car insurance. These costs will vary depending on certain factors, so you should take the time to calculate good estimates.