Buying a car of your own is a huge financial commitment. When you’re in the position to buy, and you’ve narrowed down your criteria, it might be tempting to jump on the first offer. You’ll see many appealing offers, but when poised to buy a car, remember the following costs:
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Closing costs
As with buying a house, there will be costs to finalize the car buying-selling transaction. The most common auto closing costs are documentation fees, title and registration and sales tax, when applicable.
These expenses can range from a few hundred dollars to a thousand dollars or more. Other closing costs can include GAP insurance, warranties and delivery charges.
Fuel expenses
Perhaps one of the largest expenses associated with a car is fuel. Unless you are buying an alternative energy car, gasoline will be an inevitable expense. You can reasonably expect to spend anywhere from $5,000 to $15,000 per year in gas expenses, depending on your car’s fuel economy, gas prices and how many miles you travel.
If you are buying a gasoline-dependent vehicle, this will not be an optional expense.
Insurance premium
Another expense for a car is the insurance premium, which protects you and other drivers from liability. While optional in some states, insurance is a bright idea. If you have the option to hold insurance, and you decline, you will possibly owe your DMV a penalty payment.
The cost of auto insurance varies depending on a number of factors. Age, driving history and the type of vehicle insured all factor into the cost of insurance. If you would like to avoid a pricey insurance premium, avoid buying a sports car.
Maintenance and repair costs
All vehicles will have maintenance expenses, and eventually there will be repair costs to follow. Oil changes, air filter replacements, tire rotations and changes must be done periodically, along with tune-ups. If your windshield gets cracked, it will need to be repaired.
If your tire goes flat or blows out on the highway, you’ll need to have it fixed or replaced. These costs have a huge range because each vehicle’s maintenance schedule varies, and repairs are impossible to predict.
Buying a car is an exciting experience. If you are looking at a specific make and model, research as much as possible about the vehicle’s fuel economy, required scheduled maintenance. Shop around for insurance to get the lowest quote. Take your time, do your research and plan for costs that go beyond the sales price.
About the Author:
Kara Masterson is a freelance from West Jordan, Utah. She graduated from the University of Utah and enjoys writing about business and finance and spending time with her dog, Max. For the above article, information credit to Diamond Honda, Honda service Los Angeles.
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