With tax return season nearing its peak, many consumers are looking at purchasing a new or used car. For many, tax returns are enough to provide or supplement a down payment for a new vehicle. However, there’s more to the cost of a new car than the purchase price.
Here are a few expenses to consider before buying a new or used car.
Hidden Expenses of Buying a New (or Used) Car
Insurance Costs
One of the most well-known additional expenses of bringing home a new vehicle is insurance coverage. If you’ll be taking out a loan, you’ll need full coverage insurance, which can be pricey for many makes and models. Even comprehensive coverage can be expensive, so be sure to check with your insurance agent before choosing your next vehicle.
Oil
Many newer vehicles require special synthetic oils, which can cost $50 to $60 for 6 quarts. Also, larger vehicles, like full-sized trucks, require more quarts of oil than a smaller car.
Additives and Gasoline
Some vehicles, like my 2012 Chevy Equinox, require Top Tier fuels according to the manufacturer. This can mean driving further to a Top Tier filling station to avoid voiding your warranty. If you can’t use Top Tier fuels, a special additive from the dealership is required with every oil change, which is an added maintenance cost.
Tires
Check the required tire sizes before buying a new vehicle. If your car or truck requires an uncommon tire size, you’ll want to check prices and decide if the additional cost will affect your decision to buy.
Automatic Climate Control
If your chosen vehicle is equipped with automatic climate control, this can seriously affect your gas mileage and air conditioning charging costs every year.
Hidden Defects
Buying a used car is always a gamble. That’s why you should always get the opinion of a trusted mechanic and an auto body technical before buying any used vehicle. If a vehicle has been involved in a serious accident, it could have frame damage or may have been poorly repaired. Major defects, such as leaf spring fractures, body mount rust, or rusted gas lines would be found by a skilled mechanic’s inspection.
Common Mechanical Failures
Some cars on the market have a history of common mechanical failures. These failures may result as a flaw in the design of the car, and a trusted mechanic can tell you what to expect in future repairs for any make and model of vehicle you’re considering. Always check with a mechanic before purchasing a used vehicle.
Extended Warranties
Some dealers offer extended warranties on particular vehicles. Some of these warranties come directly from the manufacturer, while others are available through a third party. Depending on the policy you’re offered, these warranties can offer substantial savings in case of major mechanical failures. Carefully consider the cost of such a warranty and consider purchasing a vehicle with an available warranty if you’re worried about repair costs.
What hidden vehicle costs have you encountered? Do you have advice for those looking for a new or used car?
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It’s totally true. I had an experience in which I bought a used car, with all the looks of being new. And in the end the cost was almost double what I would have spent on a new one, and it also hurt my credit at the bank.
I spoke about my never having bought a new car in my long life . I am over 80 years old now and have never bought a new car. All the cars I ever bought had 20,000 miles or less on them and therefore almost new. I have never had a problem . As I said before , with the 10 or 12 cars I bought in my life , I probably saved at least $ 100,000.00 or more and with cautious investing over the years probably earned $ 500,000.00 or more on my savings. [ I am a cautious investor and am out of the market now – it is irrational . I buy LOW and sell HIGH. . I still have the 2008 Lincoln Town Car that I bought back in March 2009 for $ 22,900.00 . New about 9 months earlier it would have cost about $ 45,000.00 , I saved over $ 20,000.00 . [ had 13,900 miles on it ] Because I am retired , I now only have 56,700 miles on it. It still runs like new . 2 years ago I thought about buying a new / used convertible but why ? The only money I put into it was to have it repainted this past spring. . It cost me $ 846.00 and looks like NEW.
After I got out of the Navy at the age of 22 , I have always bought low mileage used cars . To date since 1958 my first used car was a Chevrolet Impala convertible when I attended the University of Miami . The last car I bought was in March 2009 , I bought a 2008 Lincoln Town car with 13,900 miles on it . Had I bought it NEW 7 or 8 months earlier , it would have cost
$ 44,000.00 , now it cost me $ 22,900.00 . The car was like NEW and I saved $ 20,000.00 ………. The car is still like NEW with about 50,000 miles on it . I might trade it in next year for a 2015 convertible . I NEVER once had any mechanical problems . I usually ran the cars up to 95,000 miles . Buying used I probably saved about $ 100,000.00 and with cautious investing and compound interest it probably grew to over
$ 1,000,000.00 Buy new so that you can BRAG to friends and family , I brag to everyone how I saved Mega Bucks . My friend who bought the same car the previous year and paid full price , lets say we would both sell our cars at the same time , we would both get the same price , but I would be $ 20,000.00 ahead.
In my experiences with buying cars, I’ve found that a lot of used cars can be more trouble than they’re worth. My old car was giving me so many problems, I eventually decided I could save money by selling it and starting fresh. http://www.scrapcarbuyersnearme.com car buyer near me this place was super helpful, and gave me a lot of money for my old car
I am sorry I disagree with you . Out of all the used ” low mileage ” used cars I bought in my lifetime [ about 10 or 12 cars ] I never had a problem although it is possible . If you buy a used car with 70,000 miles or more , yes it is possible you might have a problem . But in every case , I traded my car in when it hit a bit less than 100,000 miles . I NEVER HAD A PROBLEM .
Another fee that can’t be forgotten when buying a car that needs to be shipped is the shipping costs. These companies also have crazy and sometimes hidden fees. Check out reviews and complaints through the BBB.
When you’re buying a used car, you can search the internet and find the most common repairs are. You can also see how long the lifetime of all car models are and what it costs to make those repairs.
The hidden costs of cars is why I barely miss then. All I have to worry about is the subway not breaking down…
Ryan, I’m not sure which vehicles require the Top Tier fuels, but the additive has to be purchased from the dealership and is quite expensive. We were told by the dealer that not following this recommendation would void the manufacturer’s warranty, as would missing any scheduled maintenance. Always read the owner’s manual- that’s how we found out about the additive option.
I think the dealer was lying to you. Required and recommended are different. Don’t believe dealers’ hype. When in doubt, RTFM.
This is a fantastic post! So many people don’t think twice about the additional expenses associated with buying a vehicle. Tax, insurance, maintenance, etc, it adds up quick!
You mention “Some vehicles, like my 2012 Chevy Equinox, require Top Tier fuels according to the manufacturer.” I have not heard of this additives and unique gasoline requirements before (beyond certain premium vehicles requiring higher octane 91-93 gasoline). Could you explain further? I would definitely like to be paying attention to this if that is the case for certain cars.
I don’t own Chevy Equinox myself, but a quick glance of the 2012 manual online statues (section 9.51) “To help keep the engine clean and maintain optimum vehicle performance, we recommend the use of gasoline advertised as TOP TIER Detergent Gasoline.” Recommended is much different than required. A few pages later in the manual, it states “For customers who do not use TOP TIER Detergent Gasoline regularly, one bottle of GM Fuel System Treatment PLUS, added to the fuel tank at every engine oil change, can help clean deposits from fuel injectors and intake valves.” Here it states the manufacturer see this as possibly beneficial (“can help”) but I again don’t read this as being a requirement (or voiding warranty). I am interested as to how they would be able to tell anyways if you weren’t using this special “Top Tier” gas.
As I am not an actual owner of one of these vehicles, I by no means have a solid understanding. So I would be interested in understanding your owner’s perspective further. I definitely want to be aware of such situations if they exist, especially since I am soon purchasing a car. Thank you for your insight and your great blog!
Top Tier gasoline. There is a website ‘Top Tier” that will list the gasoline brands that are qualified as TOP TIER fuels. The list shows those brands avaiable in the USA as well as Canada. Look this site up and you can also read the history of TOP TIER fuels and how they got the ratings. Good info, not technical!
Look into the maintenance schedule. My current car needs maintenance every time you turn around and I have spent a fortune on this.
This is very true. Especially the insurance one. Often times I hear people who say they can afford an extra $300 car payment for a new car, but do not think about the increase of their car insurance and then they are left with more than they can pay.
The same things happen to houses too. People pay $800 in rent and assume they can pay that with their mortgage, but do not take into consideration the property taxes and maintanence.