How Much Car Can You Handle?

When you start shopping for a car, it is important to remember that there are more expenses involved in car ownership than just the initial sticker price. Once you pay for the car, you will need to purchase the title, pay the state taxes, and deal with regular maintenance costs. The amount of insurance that you carry on your vehicle may depend on what kind of car you purchased and how you paid for it. Many lien holders will expect you to carry full comprehensive coverage as long as the car is being paid off. Because of the various expenses involved in car ownership aside from just the sticker price, you must consider all expenses before you understand how much you can afford to pay for a car.

Factor in Tax and Registration Costs

The tax and registration costs can vary depending on the age of the car and the state you live in. The older the car is, the less expensive it will be to purchase and the lower the tax rate will be. Usually the tag and title is less expensive on an older car, as well. Make sure you remember to factor in the possible costs of registering your car when you are building your car shopping budget. You can get an estimated tax and title cost for any car by calling your local tag agent or looking the information up on the state department of motor vehicles website.

Monthly Maintenance Budget

Once you own your car, you will need to keep it running in good condition. There are several parts that will wear out eventually due to the normal operation of the car. Create a savings account or space in your budget to cover regular maintenance, like oil changes, tire rotations, and fluid checks. Car tires can be expensive, and the kind of car you buy will make a difference. Remember to look into the tire size and the typical costs for replacing tires on the models that you are interested in.

Planning for Insurance Payments

Your insurance costs are based on several factors. Some of those factors are directly related to the kind of car you purchase. A brand new car should be covered with a comprehensive policy to make sure that the car can be repaired or replaced if it is involved in an accident. Comprehensive coverage can be more expensive, but it is a necessity on a new car because repair work on new vehicles is also very expensive. If you plan to purchase your car through a loan, you may be required to carry full comprehensive coverage. Make sure you can afford to make those insurance payments once you have purchased the car.

You can lower your car insurance costs by purchasing slightly older vehicles. Look into the types of cars that are stolen most often in your area and avoid buying those cars. You can find information about local crime rates online, or you could contact your local police department to find out where the information is compiled. Some research into the safety ratings of the cars you are interested in can also save you money on your car insurance. The safer your car is, the less you will need to pay.