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Nailing the deal on your first car is a big deal, especially when there are so many options to choose from. The one common mistake that first time car buyers make is focusing their time and energy on finding a car that comes with the right price tag, but fail to look at the ongoing costs. Here are a few ongoing costs to be aware of before buying a car.
Research
One thing that you should already have established is a budge. However, to make your car budget more realistic it is important to research. Knowing the ongoing costs that come with owning a new or used car can help you make a realistic budget. This can also give you a rough estimate on how much of a buffer you should create to help you take care of emergency expenses. You will be able to make an informed decision when it comes to purchasing the right vehicle for your budget.
Choosing a fuel-efficient car
One of the long-term costs that come with a car is the cost of fuel. This will also depend on what you plan on using your car. According to Budget Direct, fuel costs are the biggest costs for Aussies that own their cars outright with the average Australian forking $71.50 a week. This is a total of $286 per month. Knowing which car is more fuel efficient can reduce fuel costs. For example, you may find that petrol engine cars can be fuel efficient compared to a diesel engine.
Maintenance and repair costs
This is also another expense that tends to be overlooked by first-time buyers. A car can be affordable to purchase, but expensive to maintain. This will also depend on the make and model of the car. However, in general, cars that have parts that are not easily can be expensive when it comes to repairs and maintenance. Researching the costs that come with the car that you interested in can give you an estimate of whether you will be able to comfortably afford it or not.
Finance ongoing fees
Most Australians take out a car loan from a financier or dealership finance to help them secure their new wheels. Many Australians are aware that they need to look at the interest rate on a loan, but the same group of people overlook the ongoing fees and charges that come with the loan. Not checking these extra fees can blow your budget and make it hard for you to meet the monthly repayments on your loan. It is important to ask your lender about these additional fees and charges before taking out a loan.
On road costs to keep in mind
There are other costs to keep in mind such as stamp duty, insurance, and registration. These all need to budgeted for beforehand to avoid being overwhelmed with owning your first vehicle. Remember that with every decision you make remember to compare. Comparing will help you choose the best possible option that is suitable for your finances.
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This guide provides general information and does not consider your individual needs, finances or objectives. We do not make any recommendation or suggestion about which product is best for you based on your specific situation and we do not compare all companies in the market, or all products offered by all companies. It’s always important to consider whether professional financial, legal or taxation advice is appropriate for you before choosing or purchasing a financial product.
The content on our website is produced by experts in the field of finance and reviewed as part of our editorial guidelines. We endeavour to keep all information across our site updated with accurate information.
Approval for home loans is always subject to our lender’s terms, conditions and qualification criteria. Lenders will undertake a credit check in line with responsible lending obligations to help determine whether you’re in a position to take on the loan you’re applying for.
The interest rate, comparison rate, fees and monthly repayments will depend on factors specific to your profile, such as your financial situation, as well as others, such as the loan’s size and your chosen repayment term. Costs such as broker fees, redraw fees or early repayment fees, and cost savings such as fee waivers, aren’t included in the comparison rate but may influence the cost of the loan. Different terms, fees or other loan amounts may result in a different comparison rate.
