This Is the One Number You Need to Know Before Buying a New Car

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Don't forget to add these costs when buying a new car.

Key Point

• The true cost of buying a new car is higher than the list price.
• Don't forget to factor in new insurance premiums, maintenance costs, taxes, etc.
• Calculating all these costs will give you an "all-in" price for a new car.

Buying a car is a big decision and it can be difficult to know what to consider when making such a big financial commitment. You forget to factor in all the other costs that come with owning a car, such as car insurance, maintenance, and taxes. Knowing your "all-in" number before you buy a new car can help you budget properly and prevent you from buying something you can't afford in the end.

Insurance fee

Auto insurance is often overlooked when buying a new car. If you change cars or add another vehicle to your policy, it is important to update your policy so that it reflects the correct information. This will ensure that you receive the best possible compensation for your situation and that you are paid the right amount. Auto insurance for a new car is usually more expensive than an old one because it is often worth more.

In addition, the type and price of the vehicle you purchase will determine your auto insurance premium. Expensive cars are more expensive to repair or replace, and therefore more expensive to insure. Be sure to factor updated insurance premiums into all your budgets before you buy a new car.

That means you'll need to talk to your insurance company to get an estimate of how much you'll be charged if you switch cars or add another car to your policy. You should also look for the best rates and compare different insurance companies. You can find additional savings that you can use on your car purchase.

car maintenance and taxes

You should also consider the regular maintenance costs of your purchased vehicle. These costs can add up quickly, so be sure to be aware of them and take them into account when setting your budget. To get an estimate of maintenance costs, the car user can start with his manual. The manual will include the manufacturer's recommended service for each specific mileage. Car dealers can also provide estimates for annual maintenance costs. Websites such as the Kelley Blue Book and Edmunds also have calculators you can use.

Additionally, depending on where you live and the type of vehicle you purchase, there may be additional taxes associated with purchasing a new car or truck. For example, California sales tax is 9.5% in certain areas. So adding taxes to a $40,000 vehicle would actually cost you $43,800. There are also other costs that can be added to the final cost of the car, such as vehicle registration fees, paperwork fees, and dealer fees. These are the costs that need to be calculated into the all-in numbers before you start running with your new car.

Knowing your all-in number before you buy a new car is essential if you don't want this added expense to overwhelm your monthly budget. Be sure to factor updated auto insurance, maintenance, taxes, and other charges into this number to reflect reality, not just the purchase price of the vehicle itself. Doing this research beforehand will give you peace of mind when you head out to buy your next car.