How Much Is Your New Car Going To Cost You?If you consider how much your new car costs you, don't simply think about what you actually paid for the car at the dealership
However, this dollar amount is but the starting point as to what the cost of the new car is going to be and what will ultimately come out of your pocket.
Remember, what you paid for your new car and what that car costs you are two entirely different numbers... but they both come out of your pocket.
Basically there are but two different areas that cost you when it comes to car ownership... there is a definite cost to operate the car and there is a definite cost to owning the car.
The cost of owning a car is really not related at to the number of miles that you drive the car (unless this would affect your insurance premium). When it comes to being the proud owner of a car... the cost meter keeps running even if you don't put many miles on your car at all in the form of depreciation, licensing and registering, insurance, and finance charges.
Financing the car is something that the overwhelming majority of people do when purchasing their new car and more often than not there will be an interest rate associated with the financing charge.
Other fees associated with owning the car are licensing and registration. The amount of these fees charged by your local government agency is usually in line with the make and model of the car along with how old the car is. But make no mistake, this is a cost of ownership that you must pay.
And speaking of government agencies being involved, don't forget to determine what your annual property taxes will be for your new car... luxury taxes could even come into play depending upon where you live and the type of vehicle you may be looking at.
Insurance is another recurring cost of ownership that you need to get a handle on when your trying to figure your monthly budget. Insurance is an expense that many people fail to take into consideration when buying their car and they get hit kind of hard, especially if they are significantly upgrading their ride.
Depreciation is the silent killer when it comes to the cost of ownership in a new car. Without question deprecation is the single biggest cost to owning a car. Even though you don't have to make a monthly payment against the cost of depreciation, rest assured, it is a very real cost.
Most of us have no trouble at all with this concept... gas, oil, tires, maintenance, repairs, etc. Unlike the ownership expenses, these operating expenses are more directly tied to the number of miles that you drive annually.
It's important to keep a record of all your operating costs of your car. By neglecting to record and track all of the daily operating expenses, you won't know or be able to accurately budget for what your car is actually costing you. Plus, it's important to have a good idea of what your annual driving habits are costing you. Budget plays such a crucial part of the car buying equation, so knowing this number is vital as you move forward with your car buying research.
So, remember... what a car costs you is not what you paid for the car. Don't even think about going out to the car dealer and begin looking at cars or even test driving until you have completed your research and have all the numbers available to you.
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