The Overlooked Costs of a Used Car
A lot of car shoppers tend to overlook some of the costs of a used car. If you are in the market for a used car, Canada Auto Finance has the advice and lending resources you need to make an informed decision. There are many opportunities to save money throughout the car buying process that go beyond buying a cheaper car. In fact, a less expensive car might actually end up costing you more in the end. Things like insurance rates, fuel efficiency, taxes and repairs all play a big role in the overall price of a vehicle.
What to Look For
If you're on a tight budget, it is important to look at all of the factors that go into the price of a car. Sure, the sticker price is the most obvious expense. You wouldn't buy a $25,000 car if you could only get a loan for $10,000. But it's not just the price of the car that you need to watch out for. Here are some less than obvious expenses that people tend to overlook while shopping for a used car:
- Insurance rates – Most commonly, sports cars and expensive vehicles have higher insurance rates. Safer, smaller and cheaper cars will have much lower insurance rates.
- Fuel efficiency – This one is pretty obvious since we all have to fill up at the pump every week or so. A car that has gets better KPG will lower your fuel costs.
- Repairs – An old car might be a bargain at the dealership, but for good reason. You'll be paying a lot more in repairs on an old car that has high kilometers on it. If you consider regular maintenance like oil changes and new tires on top of brake or transmission issues, that bargain doesn't look like such a deal anymore.
- Backend costs – Dealerships will always try to sell you extra things at the end of a sale like rust and paint protection. Many of these are equivalent to snake oil but there may be some packages you may want to research and see if the benefits of buying it upfront will outweigh the potential costs down the road.
- Tax, Title and License fees – One of the more commonly overlooked costs of buying a vehicle is the one that every car sale requires. You must pay the tax, title and license fees associated with the car in order to legally drive it. While it might not be the factor that sways your car buying decision, it is important to know how much these fees will be before signing on the dotted line.
- Warranty – This is an especially important aspect to consider when buying a used car. The older the car, the more repairs will be needed to keep the car running and in good shape. A warranty is worth considering in order to keep your out of pocket costs down at the mechanic.