Does this sound familiar?
Your tires are getting worn, so you get all new tires for your vehicle. Shortly thereafter, new brakes. And then, upon returning home from the brake shop, your insurance bill for the next six months just happens to be in the mailbox.
More than just the initial price
Vehicle ownership is much more than the initial purchase and fuel costs. There are many things to consider:
- Regular maintenance
- Seasonal maintenance
- Potential repairs
- Annual registration fees
Over time, these items can add up and become quite costly. But there is good news! It is possible to own a vehicle without going broke. It starts with being aware and preparing yourself with things like doing some research and having a budget.
What do you consider when vehicle shopping?
When you start shopping for new vehicles, what do you look for first? The price naturally comes to mind. Vehicles that suit your needs, wants and lifestyle are likely top of the list. What about options that are available on your dream vehicle? Fuel efficiency?
Those are all fairly common items that cross the minds of shoppers. But do you also consider long-term costs of ownership?
Like many people, you may be wondering what this means. More so, why does it matter?
What are long-term costs?
Simply put, long-term costs of ownership are all of the random things for which you dish out money over the period of time that you own your vehicle.
There are the obvious items like fuel costs, insurance and regular maintenance costs. Less obvious things include the cost of financing, repairs, annual registration, depreciation, etc. When you add it all up over a period of time and then add it onto the selling price of the vehicle, it makes a difference in the total cost of a vehicle in the long-term.
How do you research long-term costs?
So, how do you figure out what long-term costs are? Great question.
You can, of course, search the internet for help and use one of the many calculators available. Some are quite detailed, which may be useful when you have a specific vehicle in mind and are creating a budget.
If, however, you are shopping and comparing a few vehicles to see what’s right for you, it may be useful to utilize a more general site. For example, Edmunds.com is an easy-to-use resource with information about a variety of makes and models, including a five-year cost-to-own comparison.*
When you enter each of the models that you are currently shopping into the Edmunds site, you have most of the information for each vehicle side-by-side to make an informed decision.
Finally, before you leave for a test drive
Before you head to the dealership for a test drive, consider your options. For instance, does buying or leasing work better for you? And don’t forget to research your lending options as well.
*Visit Edmunds.com for more information on the Edmunds Inc. True Cost to Own® (TCO®) pricing system.