Choosing the Right Car for Your Family

More Than Just the Sticker Price

If you are in the market to buy a new vehicle, you may be prone to making one of the most common mistakes by not considering all of the potential costs of a car before you buy it. Most people look at the cost as how much they are going to be paying for the vehicle. However, as they are not taking into account other costs associated with buying a vehicle, they often end up over their heads. When you are buying a car, it is about more than just the sticker price.

One of the factors that is often not taken into consideration is the cost of insurance for the new vehicle. If you have paid off your current vehicle, you may have dropped your insurance down to liability only. Before buying a new vehicle, you want to research exactly what it is going to cost you for full coverage of the vehicle, as this will be required by the lender.

Another aspect of car buying that must be considered, as well, is the cost to finance the vehicle. While the sticker price may state $18,995, this is not the real cost. The real cost is going to include the interest you will need to pay on your loan. Generally, you should expect to pay approximately 6% interest on your car loan and this, of course, will depend on your current credit score.

Along with the interest, you also have to factor in the cost of fuel for the vehicle you are buying. If you are choosing an economy car, you may find you are actually going to save money. However, choosing an SUV or a truck can certainly cause a problem with your budget.

The cost of maintenance should also be factored into the price of a vehicle. While a new vehicle will come with a warranty, you may consider purchasing an extended warranty for the vehicle, which will, again, jack the price up. On top of this, you must consider the normal wear and tear on the vehicle, regular oil changes, tires, and other maintenance items. On top of this, many repairs may not be covered under the warranty and will come out of your pocket. One vehicle could cost as much as 75% more to repair than the average car and this factor should always be researched before buying.

As many states have sales tax on a vehicle, you are going to have to figure this into the price, as well. While many states have a cap of $300 on the sales tax for a vehicle, this still must be figured into your cost of the vehicle, as well as the cost to register it.

Choosing a vehicle may be a little overwhelming, but as long as you factor in the other costs that are incurred from the purchase of a new vehicle, you will be able to make a better decision of how much car you can afford to buy and prevent yourself from going beyond your budget.