5 Car Buying Costs Buyers Should Budget For

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When it comes to buying a new or used car, there are many fees and other costs that buyers need to be aware of. No, buying a car doesn’t come with a bunch of hidden fees and costs like a house does. But there are costs on top of the car price to watch out for. Here are five of them.

1. Find out the cost of gas for the car you’re buying

High gas prices | John Cameron on Unsplash

According to AAA, the current average price of a gallon of gas is around $4.50 nationwide. In this case, it’s more important than ever to calculate how much gas your new car will use on a weekly or monthly basis. There are plenty of calculators online that can help you figure this out, or you can research the car you’re buying on fueleconomy.gov to see how much gas it uses.

2. Car insurance rates can fluctuate, so it’s important to do your research

Close up of Metromile logo
Close up of the Metromile logo. | Smith/Gado/Getty Images Collection

Car insurance rates can vary depending on the car you buy and the level of coverage you choose. FinanceBuzz editors advise you to “check with your auto insurance provider before you start shopping to compare different coverage rates depending on the car you decide to buy.” You can also check with other car insurance companies and compare prices to save money.

3. View car registration fees

a sign at the California Department of Motor Vehicles (DMV)
California Department of Motor Vehicles (DMV) | David McNew/Getty Images)

If you’re shopping for a car and have a few models in mind, it’s a good idea to check potential registration fees first. You can research the registration fees on your local DMV website and then narrow your search by the cost of each. Believe it or not, some cars can cost a lot more to register than others.

4. Maintenance and repair costs can creep up on you

A man performing car maintenance by changing the oil
Oil change | Tim Mossholder on Unsplash

Whenever you buy a car, especially a used car, you will need to consider the cost of maintenance and possible repairs. Additionally, more expensive cars can cost significantly more to maintain than their cheaper counterparts. For example, an oil change for an Audi can cost around $200, while the same job for a Honda can cost around $70.

5. Set aside money for any MSRP markups

A row of new cars at a dealership
New cars at a dealership | Julian Stratenschulte/photo alliance via Getty Images

With the worldwide shortage of chips and inventory, we now live in a time when buying a new car below MSRP might be a thing of the past. Dealers everywhere are marking up cars above their listed prices in order to make a little more money from their customers. It’s unfair, but it’s also the nature of the market right now.

In this case, we suggest you save some extra money to offset the markup cost. Also, don’t be afraid to negotiate and possibly reduce or remove the markup price altogether.

Put some money aside for those car buying expenses

If you’re considering buying a new or used car, it’s a good idea to save a little more than expected for any additional costs. The last thing you want is to take out loans or go into debt on your credit card for unexpected charges.

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