6 Costs to Budget For When Owning a Car

Cars don’t come cheap and often end up costing us way more than we could ever have imagined.

You have many other expenses to foot the bill for when you buy a car, aside from the initial purchase of the vehicle itself.

Here are six costs to budget for when owning a car.

Read More: Car Maintenance Tips for Every Car Owner

1. Buying the Car

First of all, you need to do plenty of research to find which type of car is right for you and how much you can afford to spend.

You need to decide whether you will buy a new car or a second-hand one, whether it will run on diesel, gas, electricity, petrol or be a hybrid. Do you want a manual gearbox or an automatic one? Will the body shape of the vehicle be convertible, a van, a people carrier, or a 2-seater?

Write down your needs, wants, and desires and narrow down your search from these notes.

2. Insurance

You will need some professional advice on how to shop for car insurance if this is your first automobile. The different policies on offer are vast, and prices differ significantly.

Vehicle insurance is a necessary purchase because it protects you from financial loss if your car is damaged or written off in an accident or you cause another person’s car damage. It also covers you against theft of your vehicle, fire damage, and legal or medical expenses incurred from a collision.

3. Fuel

The running costs of a car are high. Electric or hybrid cars are cheaper to run and better for the environment, but they aren’t as abundant or as readily available as gasoline-powered vehicles. They are also more costly to buy.

You should determine how many miles you will drive each year and see what your budget dictates when choosing a car. You may want to consider purchasing a vehicle with a smaller engine than the one you first looked at.

4. Servicing

If you want to keep your car in good shape and running well, you should put some money aside to pay for servicing it each year. A service is like a medical check-up for your car. A mechanic will check it over and perform tasks on it such as changing the oil and replacing liquids like brake fluid and air conditioning coolant. A yearly service before winter sets in is highly recommended if you live in a cold climate.

5. Repairs

Things go wrong with cars, and when they do, it is often very costly. So, unless you are a mechanic or good friends with one, you need to bear in mind that you will have a fork out some money for car repairs at some point in time – whether it be replacing a punctured tire or installing a whole new windshield.

6. Tax

Some countries require car owners to pay a Road Tax, which varies in cost according to the type of fuel the vehicle uses and the level of carbon dioxide emissions it produces. The money collected from this tax goes towards road repair and maintenance. In the USA, people pay car registration tax annually.

So, consider all of these expenses when buying a new car and choose one that suits your requirements and budget. 

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About FinanceGAB

Ajeet Sharma is a financial blogger and I am blogging since 2017. Financegab is a personal blog dedicated to personal finance. The main aim of this blog to help people to make well-informed financial decisions.
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