If you’re looking to buy a new car, there’s an awful lot of factors to consider in addition to the purchase price, and ensuring that you can afford them all is an essential part of the car-buying process. Here we list some factors to consider when buying a new car!
Financing vs Purchasing
If you can purchase a car in full, this is always the better option financially, as you won’t be paying any interest on the price. However, if you’re looking to finance your car, you need to assess the deal carefully and look into the loan term, interest rate and more. If you must finance, try to put down a large down payment, as this will reduce your interest rate and reduce your monthly payments overall.
Taxes and Fees
Bear in mind that you’ll have to pay sales tax when purchasing a car, and this is calculated differently depending on which state you’re in, so be sure to check the local sales tax regulations. In addition, some states charge your car with an annual tax which is variable according to the vehicle you own. All of this is also combined with registration, license plate and title fees, which could easily set you back up to $800 per year depending on your car’s make and model.
Insurance companies use a magical formula of never-ending criteria in order to ascertain the monthly premiums on your car insurance, and the power of modern data analytics is helping them to scrutinize drivers more than ever before. Although quotes will inevitably vary from carrier to carrier, younger and more inexperienced drivers will always be charged substantially more for their premiums, and people who have been involved in accidents will have higher monthly premiums too. Some vehicles are cheaper to insure than others due to a range of factors, so be sure to look into which vehicles within your price range are cheap to insure for you. There are also other ways of potentially lowering your auto insurance premiums, such as volunteering to pay a higher excess in the event that you do have to put in a claim.
If you’re looking to buy a huge gas-guzzling SUV, prepare to pay a lot in gasoline every month. Of course, your gas spending will vary widely on your type of vehicle and how often you drive, as well as the type of fuel that your vehicle uses. Buying a smaller car with an efficient engine and driving it rarely will obviously bring your gas budget down compared to driving around in a large SUV for many hours a week.
There are many other things to consider when buying a car, such as maintenance costs when things go awry. If you’re looking to lower the cost of your auto insurance, speak to a member of our dedicated team today!