Budgeting for a new car involves more than just the purchase price. There are a number of things to take into account to ensure you have adequate funds. You need to think outside the box and consider what sort of accessories you might need as well. For example, a bigger truck type vehicle may have an open air storage compartment at the back and you may have to invest in truck bed covers to stop your belongings from falling out. It is important to budget for the car you really want, the vehicle that offers you the accessories and features you need, and to avoid paying extra for things you won’t really use. While it is possible to install extra features to a car after you have paid for it, perhaps these Drawer Slides, for example, it is normally cheaper to see if these can be included when you buy the vehicle.
Whether you are buying a small city-hopping Hyundai or a new and versatile 4WD like Land Rover’s new discovery 4 you will need to consider more than just the cost of the car. You will need to calculate all the costs involved and make sure you can afford to spend that amount. If you are taking out a loan you need to work out exactly what repayments you can afford each month. Careful budgeting will ensure that you don’t spend more than you can afford and also that there are no nasty surprises.
What Do I Need to Budget For?
There are a number of things that you need to budget for when buying a car. These include insurance, registration, any dealer costs, extra accessories and loan interest. You also need to look closely at the fuel economy of the car you wish to purchase. Is it cheap to run? Check out the price of replacement parts? Does it have a warranty?
You will have to pay stamp duty on the purchase of your car. This varies between States but will be a percentage of the cost of the car – so the more expensive the car, the more stamp duty you will pay. You need to be aware of this so you can budget for it.
Don’t be fooled by the advertised price of a new car. You will often find that any and all extras cost you more. A car may be advertised for $20,000 but end up costing you $30,000 if you want automatic transmission, power steering, extra airbags etc. Ask lots of questions; find out exactly what features and are included in the advertised price and which ones are considered extras.
Get accurate costs for any extras you require. The advertised price will be the most basic version of the car; for instance, it will be for a 3 door rather than a 5 door hatch back; and it will be for the smallest litre engine available in the model you are looking at. So don’t just expect to pay more for luxury items like leather seats! Once you are really clear on the price, including extras, you can budget for your car.
It is extremely important to research the ongoing costs of your car. It is not just loan repayments that you will need to include in your budget. How much does it cost to register? What about fuel costs, maintenance and servicing? How much will insurance cost and what about roadside assistance? Take all of these costs into consideration when budgeting for your new car.