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 car and put a little love into your current vehicle, 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 car purchase. Sales tax is nearly 5% in Wisconsin—that means a $20,000 vehicle would actually cost an additional $1,000, with taxes. Keep your current car and keep that dough!
Don’t always believe the promises pushy car salesmen make…
Another cost that can add up quickly for a new car 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. Wisconsin drivers can do this online or through the mail, whereas buying a new vehicle means trudging to the DMV with your title, VIN verification, ID, and cash.
To walk into a dealership intent on buying a new car, 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 920-757-5543.