Buying a Car: How To Lower Your Costs

Oct 10
07:38

2007

Mike Hamel

Mike Hamel

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When buying a car, the number one way to lower your cost is to get a less expensive vehicle. Today’s cars are better built, which means you don’t have to buy the top of the line to get a good deal.

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When buying a car,Buying a Car: How To Lower Your Costs Articles new or used, focus on the overall price, not on the monthly payment. Here’s why. A dealership or lender can lower your payments by extending the loan. But the longer term will cost you hundreds, maybe thousands, more in interest over the life of the loan.

Spreading out the payments when buying a car could also put you “upside down” on the loan, meaning you owe more than the car is worth. If you total the car, if it is stolen, or if you want to trade it in on another vehicle, you will have to make up the difference between what you owe and what the car is worth out of your pocket.

Ongoing CostsWhat you pay for a car and for your financing are only two of the expenses of driving a vehicle. There are also ownership costs and operating costs.

Ownership costs are the same regardless of how many miles you drive. They include taxes, depreciation, finance charges (if you have a car loan), registration, insurance, and license fees.

Operating costs include gas, oil, tires, and maintenance. These go up the more you drive.

You can lower your operating costs by driving smart. AAA offers the following tips on saving fuel:

* Slow down. If your average commute includes 20 miles of highway time, and you drive it at 60 mph instead of 70 mph, you will save approximately 1.3 gallons in a 5-day week.

* Combine errands. Instead of spreading these tasks out over a few trips, do them all at once. Park in a central spot and walk from place to place.

* Shop online. Save the trips to the store, and consider other errands online, such as banking, buying stamps, and paying bills.

* Drive the small car. Do you own a SUV and a fuel-efficient sedan? Take the smaller car on any long trips you can this week.

Free QuoteYou can get more advice on Buying A Car, and receive a complimentary quote on a new or used car loan at 1-800-Bar-None. It is a quick and convenient way to find out how much you may be able to borrow when buying your next car.