Are you thinking about buying your first car? There is more to think about when purchasing a car than just the actual sale price. Before making your car purchase, make sure you also adequately budget for some of the following, which includes some overlooked (and occasionally hidden) expenses of owning a car:
There are several factors that influence your auto insurance rate, such as your location, age, and driving history. Some drivers may see a significant jump in the cost of a vehicle that would be fairly inexpensive otherwise, and insurance could possibly make up 10 percent of all car ownership costs over a five-year period. Maintaining excellent driving history can help to keep your insurance premiums at a minimum. Also, specific vehicle models tend to be prone to higher auto insurance rates than others. Compare choices to make sure you’re buying a car that offers lower insurance premiums.
The cost of gas can easily add up, especially if you drive often and/or you live in a city with higher gas prices. This extra cost can be particularly overwhelming for those who own bigger vehicles, like SUVs, which use up gas even faster. Buying an eco-friendly car, such as a hybrid or electric car, can help to significantly lower fuel costs.
If you’ll need a car loan in order to buy your vehicle, you’ll need to take interest fees into consideration. Although interest is part of your car payments, this will add up throughout the life of your loan. Depending on your interest rate and the car’s sale price, interest can easily add a few thousand dollars to the vehicle’s total cost.
As soon as you drive off in your car after you purchase it, it depreciates, which means it loses value. If you decide to sell it or trade it in later on, you may discover it isn’t worth nearly as much as what it cost initially.
Regularly scheduled maintenance costs can definitely add up, but repairs that are no longer covered by a manufacturer warranty can cost a lot of money. Depending on the car and what needs to be done, it can easily cost hundreds (or thousands) of dollars to fix. Routine maintenance can be a little annoying to keep up with, but it isn’t something you want to postpone or skip. Even routine oil changes can help save you from a lot of frustration and extremely expensive repairs in the future. Alas, sometimes things will just break, even if you’ve done everything you’re supposed to. Brand new vehicles will come with warranties that take care of certain problems for a limited time. If you buy a used vehicle, consider purchasing a certified pre-owned vehicle, which can also include a similar warranty.
Do you need extra cash to buy a car? If you’ve thought about taking out an auto loan, consider the option of buying your car with cash instead. Without a car loan, there are no monthly car payments to worry about and without interest, you’ll save money on your purchase. Getting the money you need to purchase a car may be easier said than done, but this is how Peachtree Financial Solutions can help.
If you’re receiving long-term payments from a structured settlement or annuity, we can purchase some or all of your future annuity payments and offer you your money sooner in a lump sum. Receiving your cash in one lump sum payment can make it easier for you to purchase a car. Contact Peachtree Financial Solutions today to learn more about selling future payments and receiving the cash you need to buy a car.
Nothing above is meant to provide financial, legal, or tax advice. You should meet with appropriate professionals for such services.