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.
- 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.
- 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.
- 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.
- 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.
- Maintenance and repairs. Any car you get will need maintenance but do your homework as some vehicles, such as imports, cost more to repair.
- 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.