When figuring out what you’ll pay to own a vehicle, don’t stop at the sticker price.
Factors including financing, fuel, insurance and maintenance and repairs also determine how much you’ll fork over during the life of your new ride. There’s no way to put an exact number on your total costs, but estimating them can help you better manage your budget.
Keep the following in mind when you buy:
- Search for rebates. Don’t settle on a make and model until checking for special deals offered by the manufacturer or your local dealer. These bargains go by many names — rebates, cash-back incentives or bonus cash — but they all can mean “discount” to you. Check USAA Car Buying Service for member-exclusive manufacturer incentives.
- Add up the interest. Shaving just a couple of interest points from your auto loan can mean long-term savings. Look for special financing incentives from dealers and manufacturers. Also scout for competitive interest rates offered by outside lenders, including banks and credit unions, and consider getting preapproved before you even arrive at the dealership. These auto loan calculators can help you weigh financing offers.
- Compare insurance. In addition to your age, location and driving habits, insurance companies factor the type of car you drive into your rates. You might pay more to insure a vehicle that’s commonly stolen or costs a lot to repair. Investigate the average insurance losses for the car you want to buy.
- Dig into depreciation. Unless you plan to drive your car until the wheels fall off, depreciation is a major consideration. A car with a high resale value can prove the best financial bet because you’ll get more cash when you sell it. Automobile data company ALG provides depreciation ratings.
- Factor in fuel. Choosing a fuel sipper over a gas guzzler can make a huge difference in long-term costs, so consider your commute and whether you drive more in the city or on the highway. According to the Energy Department’s fueleconomy.gov, a vehicle that gets 30 mpg will cost $672 less to fuel each year than one that gets 20 mpg (assuming 15,000 miles per year and a fuel cost of $2.69 per gallon).
- Don’t forget maintenance and repair. Putting money into auto upkeep is inevitable, but how much money you’ll spend depends on the car. Reliability is important, since a car that breaks down more often will cost you more in repairs. If you’re concerned about repair costs, consider an extended warranty, such as USAA Extended Vehicle Protection from Assurant Solutions. Be aware that warranty plans often require you to keep up with routine scheduled maintenance.
04-17-2017 07:10 AM
Content provided courtesy of USAA.