While buying a car can seem exciting, understanding the responsibilities and costs of maintaining one can significantly save you from a world of financial distress.
First-time buyers need to evaluate crucial information necessary to safeguard their money in the long run. Sure, a sweet car deal may have come your way, and time is ticking, but can you afford that car in the long term?
The vehicle type, insurance, taxes, fuel, and other regular deductibles are essential to keeping you running and on the road. In today's article, we take you through some of the crucial factors to consider when buying a car.
1. Insurance
Car insurance is a necessary measure that all car owners need to secure. However, it can be costly subscribing to a package deal that covers your entire basis without adequately considering your budget.
While it's not easy to determine your car insurance worth, rough estimates from your credit score, finances, and how far you drive can affect how much you'll pay for insurance. The overall cost of car insurance within America can range between $100 - $108 monthly.
The bigger the car, the more the insurance premiums to cover the costs of accidents and repairs.
2. License, Taxes, and Registration
The cost of acquiring a license, registering your car, and paying taxes all vary according to your local state laws and rates. For example, different states may charge you excise taxes, which is calculated based on your vehicle's depreciated value annually, while others may charge regular fees.
More so, if you're considering importing your vehicle from outside the U.S example Japan, you will be subjected to duty and shipping fees.
3. Maintenance
Maintenance cost varies according to your vehicle build and age. According to AAA, the rough estimate of annual car maintenance can cost up to $760 in total. Of course, other things such as oil changes, tires, frequent car washes, and checkups are yet to be included.
It is even more expensive if your car has a history of frequently breaking down from time to time. For example, if you plan on buying a second-hand car and the mileage is way above the 70,000 marks, be sure that those figures are bound to skyrocket.
Terrain and weather can contribute to an increase in maintenance costs. Regions with rough roads and excessive showers or snowstorms can quickly wear down your tires, paint, and chassis.
4. Fuel Consumption
Your fuel costs can vary based on the vehicle you drive. It can range from 13 cents per mile in pickups. However, on average, you expect to spend at least 10 cents per mile.
Fuel guzzlers like SUVs, pickups, and trucks will require more fuel to keep them running as compared to smaller saloon cars and hybrid. Pay attention to your vehicle's fuel economy value if you intend to cut down on fuel costs. For a more detailed list of fuel consumption per vehicle type, visit the U.S Department of Energy website.
It will help if you remember when buying your first vehicle that these prices are not always stable. The economy can directly influence gas prices, depending on how well it's currently doing.
On that topic, the geography of your state or city can affect your vehicle's fuel consumption. Poor road conditions can drastically exhaust your fuel supply quicker than smoother, tarmacked roads.
More so, the type of fuel your vehicle consumes can affect the engine quality in the long run. Fuels high in carbon can result in combustion chamber damage due to the build-up of carbon within the engine.
Top grade gasoline is 19 times cleaner than other gasoline variants. It also keeps your engine cleaner and improves the overall fuel economy. However, it comes at a steeper price. Therefore, it's crucial to assess fuel prices according to your budget. Whether it's diesel, gasoline, or directly investing in an electric car, the cost of fuel is an essential factor to consider when buying a car.
5. Fines and Parking Tickets
Anyone living in a city or suburb will tell you that good parking is hard to come by, and if it does, it's pricey. Your quick routine dash to the mall, gym, or store can prove to be costly.
Where you live plays a huge role in your parking meter fee. Most prices can range from 75 cents per hour in cities like New Hampshire, while others can range from $1 onwards in busy cities like New York.
More so, finding suitable parking can be difficult, especially in crowded places, towns, and states, which can easily land you an excruciating parking ticket courtesy of the city council.
Carpooling, getting an Uber, or traversing on foot once in a while can alleviate the extra expense of owning a car and the cost of paying for parking.
What's right for you?
Owning a car can be costly. Establishing a solid financial plan can help you maintain the costs of owning one. Take into consideration some of the factors mentioned and adjust your budget accordingly to minimize expenditure.
