As the calendar turns from summer to fall, car dealerships tend to ramp up their advertising efforts to try and unload a given year’s model. Sometimes, these ad campaigns will make grandiose claims that may seem tempting to a car owner, always remember that the cost of a new car is ALWAYS HIGHER than maintaining your current vehicle. Here’s why:
Most car loans are paid off in around 60 payments, or five years. If you forego a new vehicle and put a little love into your current car, you could remain payment-free for 5-10 years. Spend some money on upkeep when necessary, and avoid dropping thousands of your hard-earned dollars on something new (SIDENOTE: new cars require maintenance too!).
Newer vehicles typically come with higher insurance premiums. If your premium is more than 10% of the car’s value, you’re free to drop comprehensive coverage and you pocket the difference, which could mean thousands in savings over the course of a year.
Many car shoppers neglect to consider sales tax when weighing a new vehicle purchase. Sales tax is nearly 5% in North Carolina — that means a $20,000 vehicle would actually cost an additional $1,000, with taxes. Keep your current car and keep that dough!
Another cost that can add up quickly for a new vehicle is registration fees. They are much higher for newer cars. Comprised of license fees, ownership tax and sales tax, the registration fee adds a hefty amount on top of the ticket price of the car. It’s more cost effective to simply renew your current registration.
To walk into a dealership intent on buying a new vehicle, you’ll need a significant amount of money for a down payment. This sum could instead be invested and earn you interest. Isn’t it more appealing to pay yourself every month instead of a dealership?
Consider the real cost of a new car before you venture out to a dealership. Calculate what the actual cost would be, compared to keeping your current car up and running. For auto more tips or to schedule a maintenance appointment, call us at 336-294-2137.