If you are looking for a new or used car, there is a lot more to consider than the sticker price. Long-term expenses, from gasoline to repair bills, can turn into a big financial headache. If you want to keep your costs low, both up-front and over time, here are a few things to consider when you’re shopping for a vehicle.
One of your biggest expenses over time is going to be gas, but fortunately it’s especially easy to find out what kind of mileage cars get and how much you’re likely to spend on gas. If you are browsing cars on the lot, pay attention to the window sticker: under the “Fuel Economy and Environment” section, you’ll find out how many miles per gallon the vehicle gets, what you’ll pay for fuel in a year, and how much you’ll save on fuel compared to the average vehicle. Though all of these numbers are based on average driving statistics, they still offer a good rule of thumb for how economical it will be to pay for gas for a particular car.
If you’re shopping online, you’ll want to head to Fueleconomy.gov, where you can search for specific vehicles, browse classes of vehicles, or take a look at which vehicles offer the best mileage.
Hybrid or electric vehicles.
The biggest way to save money on gas is to buy a hybrid or all-electric vehicle. But while these vehicles can save you money over time, they have a higher up-front cost than a traditional vehicle—some a much higher up-front cost. Weigh the cost difference between the hybrid or electric vehicle and the gasoline vehicle you are considering, and then consider the difference in mileage each gets. You will probably want to break out a calculator to determine how many miles you’ll have to drive before the hybrid or electric car pays for that difference—if it’s longer than you’re likely to keep the car, it’s not worth it.
However, also bear in mind that sometimes you can find hybrid or electric models that are a few years old at a more moderate price—and, additionally, you may qualify for tax rebates that could make going green more appealing.
The insurance rate you will get isn’t the same for every vehicle, as newer cars with better safety ratings tend to get lower insurance rates. Once you’ve narrowed your search for the perfect car down to a few specific models, call your insurance company to see what it would cost to insure them. You may find that a lower rate makes you prefer one model over another.
You should expect warranties with new and, sometimes, used cars (especially used cars that are sold “dealer certified” off a dealer’s lot). A warranty can cut down on out of pocket expenses if something goes wrong, so you will want to take a look at what kind of warranties are on offer for any vehicles you consider. How long do they last? What do they cover? Can you purchase an extended warranty that will expand coverage? Though you don’t necessarily want to be upsold on an excessive warranty plan, depending on the price and the coverage that extended warranty could be a good buy that will save you money over time.
Different makes and models of vehicle can have vastly different repair costs—and if you’re looking to keep your costs down, you’ll want to consider how much you could spend on repairs over the life of the vehicle. Is it reliable or does it break down often? Are parts reasonable or pricey? If you have a trusted mechanic to talk to, they can be a great resource for information on this. If you aren’t buying new (and it’s not a car that comes certified from a dealership), you will want to take the car by a mechanic regardless to give it a thorough once-over before you buy: this will help ensure you’re not getting a lemon.