Buying a car, whether new or used, can be a fun and exciting experience. However, just like any asset you own, there are a lot of costs involved with owning a car. Some are pretty straightforward, but others should be analyzed to make sure that you fully understand what you are getting into like the process to find cheap insurance. Here are some basics to look into when considering owning a car.
The biggest cost of any car is the price. Whether you buy or lease a car, this will most likely be your biggest expense every month or upfront if you pay cash. If you are going to be getting a car loan, you should do your homework and compare different lenders such as HSBC Auto Loans and your local credit union. You should also use a car loan calculator to look at the impact of different rates and down payments.
If you lease a car, you should carefully look at what you are getting and what you must put in for a down payment. You should also know exactly how many miles you get per year, and you may want to consider purchasing gap insurance in case something happens to the vehicle.
Maintenance is an expense that nobody enjoys paying but is essential for maintaining your vehicle. Normal vehicle maintenance includes oil changes, new tires, new brakes, and more. Carefully read through your owner’s manual to see what the manufacturer recommends and how often. Many newer model cars can go much longer without oil changes than in the past. It is typical to see 7,500 to 10,000 miles between oil changes compared to 3,000 to 5,000 in the past.
You should be budgeting $50-100 per month for maintenance of your vehicle, because it can be expensive.
Finally, almost every car needs gas, and gas is getting more expensive all the time. You should consider your fuel usage carefully when buying a car, because fuel costs can add up. Getting a car with high fuel efficiency can pay you back in the long term with savings at the gas pump. Depending on your commute, you need to budget for gas accordingly.