A car is a significant financial investment, and there are many things to consider before taking the plunge.
In addition to the purchase price, you also need to think about running costs.
Here are six of the most important things to keep in mind.
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Coming up below are some running costs to keep in mind when you purchase a car.
6 Running Costs When Buying a Car
One of the essential running costs to consider is fuel. How much will you need to spend on petrol or diesel each month? It’s not just the cost of the fuel itself that you need to consider; you also need to factor in fuel economy and how far you’ll be driving. Use an online fuel calculator to estimate your monthly fuel costs. Then, if you have the budget for it, consider an electric vehicle which will save you a lot of money on fuel in the long run.
Another important consideration is maintenance and repairs. Even if you buy a brand-new car, things like oil changes and services must be done regularly. And, inevitably, unexpected repairs will come up from time to time.
Another running cost that you need to factor in is a registration and average car insurance cost. You’ll need to renew your registration in most states every 12 months. The cost will vary depending on things like the make and model of your car and your post code. As for insurance, this is something that you’re legally required to have if you want to drive a vehicle on public roads. The cost will depend again on factors like your car, age, and driving history. Shop around for quotes from different insurers before making a decision.
Depreciation is something that all car owners need to be aware of. Simply put, depreciation is the decrease in the value of an asset over time. Regarding cars, depreciation can be significant; some models can lose up to 40% of their value in just three years! Therefore, you need to factor into your budget when buying a car so that you don’t end up being upside down on your loan (owing more than the car is worth).
If you’re taking out a loan to finance your new car, then there are additional costs that you need to think about, such as interest payments and loan fees. The good news is that plenty of options are available for financing a car; work with a reputable broker or lender to find a loan that suits your needs and budget.
Another thing to remember is that tires will need to be replaced from time to time. They usually last around 40,000 to 50,000 miles, depending on your driving habits and the type of tires you have. Keep an eye on the tread depth and replace them when they get low.
These are just some running costs you need to consider when buying a car. Do your research and factor all these costs into your budget before making sure you can afford the ongoing expenses of owning a vehicle.
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