A car is one of the biggest investments you will make in life other than the purchase of your home. A new car may represent your dream ride or simply a way to get you around town. Regardless, buying a new set of wheels puts a significant dent into your budget. Often, the prospective car shopper does a lot of planning to figure out how to afford a new car, but sometimes even the best planners get caught unaware by situations that derail their new-car budgets.
You've saved up for your car and head off to the dealership, only to discover that lo and behold, it's going to cost a lot more than you anticipated. Advertisements usually state the lowest price for the vehicle at its base model status, which may lack several common options such as power windows or locks. Standard models often have manual transmissions, fixed steering wheels and steel wheels. If you're hoping to get a model with fancy wheels and luxury options, investigate the price more carefully. Information about pricing and options is available on car manufacturers' websites. Check for specific pricing details with the options listed you desire. The difference between the base price and the price with all of your preferred options may add up to $10,000 or more. If you can't find the information you want online, contact a local dealer for pricing information. There are many additional charges that could surprise you, too. In addition to the purchase price, you will have to pay taxes, a document fee, titling fees, the cost for license plates and registration and inspection and emission fees. Often car dealers or finance officers encourage buyers to purchase additional, extended warranties that cost several thousand dollars.
One thing that might foul you up is that you're all set to buy your new car and you suddenly discover that bill you forgot to pay six months ago has put a stake through your formerly good credit score. Checking your credit score ahead of time and attempting to fix any errors you find on it may help you avoid additional costs that derail your budget. Also, depending on the interest rate you get for your loan, your monthly payment may end up being more than you expected. Another charge that may come as a surprise is a set-up or application fee for your loan application. Some banks and lenders charge fees that can range from $100 to $500 or more.
You've made sure to include insurance in your plans, but when you drive your new car off the lot, the first thing it does is blow a hole in your budget with insurance costs. Insurance for your old car may have only been a few dollars per month, but insurance on a new car will be considerably more expensive. While your budget may have room in it for the newly established car payment, it may not have enough left over to pay for the insurance. Typically, insurance for SUVs, sports cars or luxury models preferred by car thieves is significantly more costly. Call your agent ahead of time to inquire about how much your insurance will change if you purchase the new car.
In addition to required service visits to maintain the warranty, some cars just are more costly to run and maintain. Supreme fuel requirements, high-profile tires and expensive replacement parts make some makes and models very expensive to drive off the lot. Anticipate maintenance costs by researching your car on automotive sites such as Edmunds.com or others.
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