(Time of reading: 1 min)
If you’re getting ready to buy a new or used car, you probably have an idea in mind on how much you want to spend. When purchasing a car, many people focus on the price that they finance, or the amount of cash that they pay. While the price of the car is one expense, it’s not the only expense associated with owning a vehicle. Let’s show you how to calculate the true cost of owning a car so that you can adequately add the expense into your budget.
Since your payment amount (if you financed), is part of the cost of owning a car, your first step should be determining how much that payment is going to be. The payment amount is going to include the purchase, plus the interest. The total payment will also depend on how long you plan on financing the car for.
Once you determine how much your payment will be, the next step is figuring out your insurance. It’s always a good idea to call your insurance company, or retrieve a quote online so that you’re not set on one type of car, only to find out that your insurance will be very expensive.
Next, think about how much money you spend on petrol with your current car – is the new car that you want going to be more efficient, or less efficient? If less, factor in the difference to the trust cost of owning that car. And finally, don’t forget about regular and routine maintenance costs. Engine oil changes and replacement parts also need to be factored into the cost.
Don’t simply focus on how much your payments are going to be – remember to include all of the extras into the true cost of owning a car in order to determine if you can affordably cover the costs.
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