If you’re looking to buy your first car, congratulations! We’re very excited for you. You’re about to enter a world of freedom and independence. You’re going to experience the thrill of speed (unless you’re buying an old banger?) and you’ll learn the joy of driving. Best of all, you’ll have a car to call your own. You might even give it a name. But, before we get too excited, let’s just check that you know what you’re getting yourself into. Sure, we like to think we’ve budgeted for our new car. But have you considered all the hidden costs that mount up when you own a car? Let’s take a look at some of the biggest.
Loan repayments or finance
Not many people can afford to buy a car outright these days. Instead, they break the payments into chunks, and pay month-by-month. Now, that sounds easy enough, but have you considered exactly how much you’ll pay, and for how long? Those repayments will incur a certain level of interest, and it’s a long-term commitment. Make sure you have a plan to cover those payments, and eventually buy the car outright.
Insurance covers you and your car in the event of an accident or theft. It also covers any third parties involved in the incident. Not only is it good sense to take out an insurance policy, it’s also a legal requirement. The bear minimum policy is third-party (which covers other cars). But there is also third party fire and theft, fully comprehensive, and insurance (trailers) if you’re towing anything. Every car falls under a different insurance cost bracket, so make sure you get a quote before you buy.
The roads you drive on must be paid from somewhere. That somewhere is your pocket. Road tax ensures that the infrastructure around you is modern and up to date. It pays for new roads, traffic lights, and any other driving-related public services. Again, the tax bill varies according to your car. In fact, some modern economical cars incur zero road tax whatsoever. Find out where your vehicle qualifies before you buy.
Of course, without petrol, you’re going nowhere! This is a weekly cost that quickly adds up. Please bear in mind that the car’s factory mileage figures are often much higher than real life. When you get it out on the road, you’ll see a much higher fuel consumption. So, when you’re doing your sums, always over-compensate. The price of petrol and diesel fluctuates regularly, so keep your eye on the price. This is all assuming you don’t put the wrong type of fuel in the car, which costs a fortune to repair!
Parking is one cost that many drivers tend to forget about. Yet, it is often the one that cripples your budget. Consider how you will use the car, and whether it will require parking charges. Do you need to buy a parking permit for your street at home? Will you pay for parking at work every day? It quickly adds up, and the monthly figure might take you by surprise.
Before you jump behind the wheel, make sure you’ve added up the costs! Have we missed any other crucial costs?