For many people, buying a car is one of the biggest purchases they’ll make during their life. Because of this, it’s important that you take your time to ensure that you’re making the right financial moves and that you’re ultimately getting a car that’s going to suit your physical and financial needs.
To help you in achieving both of these outcomes, here are three costs to consider when buying a new car, aside from the obvious cost of your car loan and monthly payment.
If you choose to buy a car from a dealership, regardless of whether you’re buying a brand new car or a previously owned car, there are likely going to be some additional fees that you’ll incur.
According to Jon LInkov, a contributor to Consumer Reports, some of the most common fees include things like documentation charges, advertising fees, delivery or preparation fees, loan payment fees, market adjustment fees, and more. However, if you know about these fees beforehand, you might be able to negotiate some of them down so that you don’t wind up paying much more than the initial sticker price that you agreed to pay for the car in the first place. But with these fees in place, you’re likely to pay a decent amount more than what you thought you’d pay just for the vehicle you’re buying.
The Cost To Insure The Vehicle
Once you have your new car, you’ll have to insure it. But depending on a variety of factors, the cost to insure your car will vary drastically.
To try to keep these costs as low as possible, or at least within a range that you’re aware of and comfortable with, Christian Wardlaw, a contributor to Auto Trader, recommends that you research insurance costs before you decide on a car to buy. Depending on what car you get, what your driving record is, and other demographic factors, you might be paying a lot more for car insurance than you assumed, which can be a big cost in buying your new car.
What You’ll Pay To The Government
In addition to paying for your car and paying certain fees to the dealership, you also need to remember that you’ll have to pay a certain amount to the government as well.
According to Kevin Mercadante, a contributor to Money Under 30, the average cost for things like licensing, registration, and taxes for a vehicle are about $668. While this number will vary based on where you live, you should expect to pay around this much to the government each year to ensure that you’re legally driving whatever vehicle you buy.
If you’re thinking about buying a new car, consider the additional costs mentioned above that you’ll need to include when figuring out your budget for this purchase.