After shopping online and finding your perfect vehicle, using a car cost calculator may be the best thing you can do to know tour total new car cost after negotiations and financing.
There are fees and costs that are not necessarily noticeable on the sticker price of your vehicle. When you are crunching the numbers after deciding on your preferred price, there may be additional money you will have to include in your financing.
One of the greatest benefits of using a cost calculator is that the program figures out all of the costs that you might incur in your car's first five years. This information includes the monetary depreciation of your vehicle as you pay over time, projected increases and decreases in gasoline prices, even changes to your potential financing plan. This will also be good information when you choose to sell your car. Cost calculators can also figure in potential maintenance problems that occur over time, to give an estimate of how much you might need to financially contribute in the future.
New Auto Costs Factors
When buying a car, many people only consider the sale price of the vehicle and perhaps any discounts or rebates they may receive; however, there are many other factors that impact how much a new car actually costs in the long run.
According to the Bureau of Labor Statistics, annual costs of vehicle ownership are approximately $4000. Finance charges are $400, gas and oil are $2000, car insurance is $1000, maintenance and repair are $800, and other fees amount to $500. These costs are averages which may be more or less for the type, make and model of vehicle.
Of course, the most obvious factor is the sales amount and any discounts you're able to negotiate with the dealership. Discounts will impact all phases of your car purchase. The more you save on the purchase price, the more you save on the cost of the vehicle.
The Interest Rate
If you calculate how much the total of all of your monthly payments will be, you may be shocked to see how much more it is than the price you thought you were paying for the vehicle. Interest rates can add thousands of dollars to the overall cost of a new car or truck. Negotiating only a small half-point or one point difference in an interest rate can often lead to saving hundreds, if not thousands, of dollars.
Multiply the number of months times your monthly payment amount. Then, add your down payment amount or amount given to you for your trade-in. This figure is the total that the vehicle costs you over all, before insurance or other maintenance costs.
Car Insurance Premiums
Something else that will increase the overall cost of owning a new car truck is your car insurance premiums. While these costs are certainly unavoidable, you should always shop for the lowest insurance premiums for the type of insurance protection you need. Lowering insurance premiums will lower the overall cost to operate your vehicle.
Car Related Taxes
Taxes are another unavoidable part of owning a new car. You have to pay sales tax if you live in an area that requires it, and will have to pay taxes to register your vehicle and pay inspection fees. Furthermore, every state requires you to purchase an annual authorization sticker for using your vehicle on state roads and highways. These taxes also increase the overall amount required to operate or own a car.
Other Types of Charges
In addition to all of the above, you will of course be required to purchase gasoline and oil. Furthermore, you need to perform routine maintenance to make sure that it remains in good running order. You will occasionally need to pay for tune ups, changing a tire or performing other simple repairs to protect your investment.
As you can see there are many more costs than the sales price of a new vehicle to be considered. Therefore, you should do as much research as possible and try to determine how much a vehicle will cost you to maintain and operate for a given period of time. By doing this, you will be able to accurately budget an adequate amount of money each month to make sure that you're able to operate your vehicle in a manner that suits your needs and lifestyle.
9 New Auto Costs to Keep in Mind
When buying a new car it is a good idea to have has much information as possible in order to make certain you are getting a good deal and not paying any unnecessary auto costs. Dealerships must make a profit or they won't stay in business. However, some of the fees they charge are negotiable or unnecessary. Knowing these nine new auto costs of will help you negotiate a better price and make a better informed purchase.
- Dealer prep. This is meant to cover the dealership's costs of preparing a car for sale. It includes washing the car and vacuuming the seats. This fee can easily run several hundred dollars and is usually nothing more than profit for the dealer
- Dealer-installed options. These may include rust proofing, paint sealer, fabric sealer, more expensive wheels, window etching and even higher quality floor mats all at additional cost. While the dealer will perform these tasks for a fee, most of them have already been done by the factory, and so are redundant and you shouldn't be paying extra for them
- Port installed options. These are components or services foreign car manufacturers add at the port such as rubberized undercoating. These fees can add several hundred dollars to the price. Check to make sure you aren't paying twice for options the factory has already included
- Dealer holdback allowance. This is a 2 to 3 percent fee intended to help car dealers recoup interest on the loans they use to buy new cars from the manufacturer, pay for showroom maintenance and employee salaries. Since this is being paid to the dealer by the auto maker, you should be able to negotiate this out of your price
- Additional dealer markup. This fee is added by the auto dealership allowing them to make a profit. Typically, this is between 15 and 30 percent of their invoice price, so you should never pay the entire markup
- Destination charge. This is the fee manufacturers charge the auto dealership for transporting the car from the factory or port of entry and is generally non-negotiable
- Advertising fees. Manufacturers pass on the cost of national and regional advertising to the dealers. These fees are typically added to the price of a new car; however, cars sold online generally do not have this fee
- Documentation fees. These can run several hundred dollars and are generally higher than actual administration costs, thereby creating additional dealer profit
- Sales tax. This adds a substantial amount to the car's price, and ranges from ranges from 2 to 7.25 percent, depending on locale.
Keep in mind that sticker price will vary from dealer to dealer, so it is worth the time and effort to thoroughly research prices before car shopping. Online research is the fastest and easiest way to determine the actual cost of a new car. CarsDirect is a great online resource for determining the price of new and used cars.
By understanding these auto costs, you will save time, money and have a more pleasant car buying experience. Additionally, buying online is also an excellent way to save money; it eliminates many of the fees auto dealers charge and takes the hassle out of buying new cars.