It’s easy to get swept up in the process of buying a car and not consider the other costs associated with such a large purchase. Taking the time to identify hidden costs can affect your budget and decision.

  1. Interest. Whether you’re getting a loan from the credit union or financing through the dealership, you’ll be paying interest for the vehicle financing.
  2. Fees. There are numerous fees that come with the purchase of a car – registration, title, etc. These can add up quickly so be prepared for the additional expense.
  3. Add-ons. Once you come to a purchase decision the dealership might try to get you to purchase add-ons such as extended warranties, credit insurance, and other items. While they do come in handy be aware they are an extra expense to consider.
  4. Insurance. Buying a new car means a new insurance contract. Typically the cost of the premium will increase for a new car as repairs are more expensive.
  5. Maintenance and repairs. Any car you get will need maintenance but do your homework as some vehicles, such as imports, cost more to repair.
  6. Fuel. While gas prices fluctuate it’s important to identify how much you drive and the cost of gas mileage for the vehicles you’re interested in. If you drive a lot, a gas-guzzler may not be the best option.

By taking the time to identify these hidden costs, you can enjoy the purchase process without unexpected hits to your budget.