4 Hidden Costs You Should Plan for When Buying a New Car

4 Hidden Costs You Should Plan for When Buying a New Car

Owning a new car is like a rite of passage for many Americans. According to the Zebra, 88% of Americans already own cars. You may have realized you can easily make a down payment for your dream car and start driving it next week, but knowing what it will cost you is a good idea. Before hitting the road in search of Orlando car dealerships, discover four less-talked-about costs of new car ownership.

Cost #1: Fuel Costs that Fluctuate by the Day

Buying a car is only one part of the equation; you will need fuel daily on the road. The never-ending need for fuel and fluctuating fuel prices means you never really know how much you’ll pay in a year. According to the Energy Information Administration, prices depend on the cost of crude oil, which is subject to multiple external factors beyond your control. You can expect to use about $2000 per year on fuel alone. So, before you drop by the new car dealership to get the ride of your dreams, ensure you have the fuel costs figured out in your budget.

Cost #2: Depreciation with Every Mile

The moment your car leaves the showroom, it starts depreciating. It means it will be worth less for every mile you drive, making a new car a depreciable asset. According to Lending Tree, your car could depreciate by as much as 40% within the first five years. Depreciation leads to financial loss and decreased net worth, but there are ways to slow it down. A good tip is to follow the manufacturer’s guidelines and regular car maintenance.

Cost #3: Maintenance Cost

Cars are assets that require stringent maintenance practices if you want to enjoy a longer shelf-life. Maintenance could also mean the difference between life and death, mainly when accidents occur. Care needs routine maintenance to prevent other long-term issues, from oil changes to keep the engine healthy to brake inspections. Yet this comes with unexpected costs. You’ll need to pay an auto technician to inspect and repair worn-out parts. Some new car dealerships have a range of services to help with maintenance, but you still have to pay out-of-pocket.

Cost #4: Parking Fees and Violation Fines

An easy-to-forget cost of car ownership is parking fees. Since the cost of one-time parking seems small, it might escape your mind how much you’ll spend in a year on parking. Parking fees will depend on where you live and whether your workplace has designated accessible parking. The cost will likely increase in populated cities such as New York. When you add parking violations, your combined parking fees could cost more than fuel. According to the New York Times, if you get three parking tickets ranging from $65 to $180, you may have to pay about $345 in parking violations alone.

Take Away

Some hidden car ownership costs are:

  • Fuel costs that fluctuate depending on external factors such as geopolitics
  • Depreciation that’s dependent on car use and maintenance practices
  • Maintenance costs – both scheduled and random
  • Parking fees, tickets, and violations

Now is your turn. What are some of the unexpected costs you’ve encountered with car ownership? Share your lifestyle wisdom with us to help other prospective car owners. Comment below or share this post with friends to get their perspective.