Ready to Buy a Car? Keep These 4 Hidden Costs in Mind
Congratulations! You're planning on buying a car and can't wait to park a shiny new vehicle in your driveway. Not so fast. While buying the car may be exciting, you should keep in mind these four expenses before making your choice:
Regular Maintenance: As much as we'd like our cars to stay new forever, parts break. Regular maintenance may put a dent in your budget, but it ultimately staves off the march of time and saves you big in the long-run. In addition to oil, make sure to regularly check other fluids, battery, tires, and anything else that needs to be refilled or changed.
Taxes: No one likes to pay taxes, but there's little choice in the matter. From paying the initial sales tax on your car purchase to annual registration renewals, taxes can eat into your budget. Even a significant part of gas price is comprised of taxes. Keep this in mind and do your research when picking out a car, and consider downgrading your intended purchase. Overextending to buy a nicer, but a more expensive, fuel-hungry car can lead to greater tax costs.
Depreciation: Vehicles are notoriously poor investments, losing value as soon as they drive off the lot. But, some cars retain value better than others. Keep this in mind when choosing your future ride.
Opportunity Cost: If you are buying with cash, that’s great, but opportunity cost is a real thing. What else could that money be used for? Paying off high-interest credit cards? Instead of cash, consider taking out a low interest loan. It may save you more in the long-run.
Of course, there are many other costs to consider. So, before spending the day at dealerships, make sure your budget is prepared for the costs of car ownership. Auto insurance and gas may seem like the obvious expenses, but there are others to consider as well.
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