Planning for new car expenses

Retired By Retired, 18th Nov 2010 | Follow this author | RSS Feed | Short URL http://nut.bz/1zsobh58/
Posted in Wikinut>Money>Mortgages

Cars, houses, and babies , every one of them is going to cost you more than you expect. That’s because they all come with hidden expenses. A new car probably will raise your auto-insurance premium, for example, but few people consider that when they’re taking a test drive.

Car Expenses

Whether you’re buying a new car or a used car, or investing money in your current car to keep it going as long as possible, here are some things you should take into account when you’re crunching the numbers:

Insurance costs: New cars generally cost more to insure than older cars, and some models are more costly than others. You can get breaks on the premiums if the car has certain features like anti lock brakes, air bags, and anti theft devices. You also can get discounts for taking a defensive driving course, having a good driving record, and insuring your car and home with the same company.

Most states require you to carry liability insurance on your car, but collision insurance may be optional after you’ve paid off your auto loan. Go to Kelley Blue Book’s Web site (www.kbb.com) and look up your car’s trade-in value. If it’s low and even a minor collision would total your car, consider dropping collision insurance. Never drop your liability insurance. Even if your state doesn’t require it, liability insurance is essential to protect you against costly lawsuits if you have an accident where you’re even partially at fault.

Maintenance and repair costs: You can get the oil changed anywhere, but for more extensive maintenance or repair projects, you may have to go to the dealership or a mechanic who specializes in your car make. Parts for some cars may be more expensive, too; even tire prices can be substantially higher for sports cars, for example, than for your basic sedan.

Fuel costs: With gas prices hitting record highs, mileage can have a big impact on your fuel budget. Also, high-performance engines generally require higher-octane gas, which can raise your fuel costs considerably.

Consumer Reports (www.consumerreports.org) has a “cost of ownership” comparison report for different makes and models of cars, which includes such things as depreciation, maintenance and repairs, insurance, fuel costs, and interest and taxes for some 300 vehicles. You can see how much it will cost you to own any one of these vehicles for five to eight years. The report is available online (although you have to subscribe to the site to access it — you can get a one-month membership for $5.95 or a yearly membership for $26).

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Comments

author avatar Jerry Walch
18th Nov 2010 (#)

A very informative article Jo.

Liked. Tweeted.

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author avatar Retired
18th Nov 2010 (#)

Thank you Jerry

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author avatar Rose*
22nd Nov 2013 (#)

Don't forget the cost of tax on the car.

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