Costs to Factor In when Buying a new Car

Friday, April 11, 2014, 1:00 PM | Leave Comment

The Manufacturer’s Suggested Retail Price or even the price you negotiate with the dealership doesn’t imply the true cost of a brand new car. Drivers need to consider the following costs associated with owning a vehicle.

Costs to Factor In when Buying a new Car

  • Refueling & Recharging

    The biggest monthly cost of owning a gas powered vehicle is refueling. On average, a driver in the U.S. spends well above $150 per month on filling the gas tank of a car. A hybrid vehicle can cut down annual expenses on gasoline by a significant amount.

    A 100 percent electric vehicle may cost only a few dozen dollars per month to charge through a home’s electrical outlet. Hybrids and electric cars generally cost more outright, so you need to calculate whether the extra cost up front is worth the savings in the long run. Even getting a smaller car that gets a bit better gas mileage than a bigger car or SUV may be worth the cost.

  • Insurance

    Auto insurance contributes to major fixed expenses associated with car ownership. Monthly premiums vary significantly depending upon an array of factors including a driver’s profile and the type of vehicle insured.

    Nevertheless, drivers may reduce insurance costs by building a safe record and taking defensive driving classes. The cost of insurance also varies based on where you live.

    For example if you live in a busy city like New York, your insurance will be more expensive when compared to car insurance in Oklahoma City.

    Car owners can also prepare to pay a fixed deductible amount on every claim that requires repairs or auto body work.

  • Repairs

    Car garages and auto bodies charge a flat hourly rate on labor. However, the prices of auto parts vary significantly depending upon the make and model.

    These days, car owners save money by purchasing replacement parts at online auto parts stores. Most dealerships overprice certain exclusive auto parts for upscale cars such as roadsters and executive sedans. In general, premium foreign cars are much more expensive to repair than affordable American vehicles.

  • Service & Maintenance

    Every vehicle needs to be regularly serviced and maintained. Fixed expenses of car ownership include oil changes, tire rotation and tire replacements.

    In average driving conditions, some vehicles tend to wear out the tread of tires in a few months. On regular intervals, the fluids of a vehicle need to be flushed out and refilled.

    During the summer season, the air conditioning system may require a quick touch up especially in the radiator and coolant hoses.

  • Convenient Amenities

    Car owners might have to pay for monthly subscriptions such as Satellite Radio or High Definition Radio. Additionally, safety and convenience packages such as OnStar can also be purchased.

    Some vehicles may also be equipped with advanced mobile hot spot service that’s offered through wireless carriers. For monthly subscriptions, smartphone apps could also be synced to certain cars.

When buying a new automobile, long term expenses for owning a car should be carefully considered. Fixed and variable costs of car ownership must be properly balanced according to a budget.

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