There is a lot more to buying a car than paying the monthly note. There are expenses for insurance, gas, oil, tires and maintenance, just to name a few.
In 1992, for example, the average cost to own and operate a car was $3,100, says the American Automobile Association. That figure was based on 15,000 miles of driving.
“The kind of car you purchase and how much you pay for it may well put a bigger dent in your budget than you planned,” said Gene M. Buckno, president of the Pennsylvania Institute of Certified Public Accountants.
Here are some things to consider:
– When buying a new car, find out the invoice price-the amount the dealer paid. Then, negotiate up from that figure rather than down from the sticker price.
– If you plan to trade in your old car, determine how much your new car will cost before negotiating a trade-in price.
– When shopping for a loan, look for the lowest annual percentage rate (APR), and consider how the APR will affect the total cost of the car over the life of the loan. If given the choice between a cash rebate or cut-rate financing, the rebate is often the better deal.
– Don’t forget about depreciation-the amount by which your car’s value will decline over a specific period. Some cars hold their value better than others.
