There are a lot of things about owning a car which take first-time owners by surprise. Following, five of them will be explored to help you keep from getting unexpectedly impacted in a negative way.
The expense of your vehicle isn’t solely encapsulated in your buying cost. You’ve got to deal with insurance expenses, you have to deal with traffic tickets, maintenance, gasoline, augmentations, and monthly payments if you purchase new. What this ends up being annually will differ per person.
Buying new changes the cost from buying used; as does buying the vehicle outright as opposed to in monthly installments. If you’ve got a $200 car payment, averages of $200 a month in maintenance like oil changes or regular washes, fuel costs of $250, and incidentals of around $50, that’s $700 a month. $100 in insurance is the cherry on top.
In total you’d be looking at $9,600 a year. Across the spread of the United States, USA Today puts the cost of vehicle ownership at $10k a year. However, you can reliably own and operate a car for $3k or less a year if you buy outright and drive properly.
There are a lot of things to think about when buying a new car, not least of which what your costs will be after you sign on the dotted line. Whether buying new or used, you should buy outright. Cutting that $200 car payment from the hypothetical cost scenario above would save you $2,400 a year.
If a payment plan didn’t include interest, maybe it would be worthwhile, but generally they do include interest. A better tactic is not going into car ownership until you can own a vehicle free and clear the day you buy it.
Going used will likely save you money owing to depreciation. Cars depreciate fast, used ones will still have 100k+ miles in them at around the $5k bracket. Make such a vehicle last you a year or two and you more than make your investment back.
The Point Of No Return
There is a point at which repairs on a vehicle are more costly than just getting rid of it and buying another. If you’ve got to spend $3k on repairs for a car that will only have a year or two of life left after the fix, that’s probably not worth it.
Sure, you could buy new and join the million-mile club by replacing components as necessary and constantly taking care of your vehicle. But life likely won’t let you take care of your car how you would intend. A better tactic is to weigh your options and know when to cut a dying vehicle loose and invest in a new one.
Buying Age And Gender Will Affect Overall Expense
If you buy a car in Wyoming at the age of sixteen as a male, you’re going to pay way more money in terms of insurance. Accordingly, you would be wise to buy a beater and fix it up as best you can when components break as a means of conserving cost.
After the age of 25, you get a big break in monthly insurance costs, provided you have a clean enough driving record. Women don’t have so high premiums as mean because statistically they are less likely to be involved in a traffic accident, and insurance companies base what they charge on such statistics.
Don’t drive like a hot-rod, unless you can afford to make the repairs. Careful driving can extend brake life, engine life, and the overall longevity of your vehicle. The million-mile club proves this.
Those among the club get where they do through a combination of preventative maintenance and defensive driving. Plan your trips out, minimize distances, avoid traffic, drive carefully, don’t be a “hot-rod”, and you’ll likely extend your vehicle’s lifespan substantially.
Informed Vehicle Ownership
Cars depreciate quickly, and you should never look at one as an asset like you would a home. Rather, you should look at vehicles in terms of time and yearly costs. If you can own a car free and clear for under $10k initially, and less than $5k a year after that, in three years it will profit you in terms of utility.
Successful vehicle ownership is about finding the right balance. Careful, conscientious driving and strategic planning can help you get the most from what resources you have available.