Budgeting for Your Next Car in 2024: What To Consider
What’s the best way to budget for a car in 2024? Apart from the price of the car and the monthly finance payments, there are other expenses to think about. You also need to be ready for taxes, congestion charges, fuel costs, as well as insurance, repairs and maintenance.
Let’s take a look at this guide on how you can work out a good plan to budget for a car in 2024.
Fuel Costs and Road Tax
Your expenses for the road tax and fuel for the car are the most important ones to secure to use your vehicle. Once you’ve decided on the price range of your car, these two are the next expenses to consider.
It’s simple to get an idea of how much road tax you need to pay. What you have to remember is that the higher the CO2 emissions of your car, the higher the cost of your road tax or Vehicle Excise Duty.
Diesel and petrol vehicles usually cost £140 annually for the road tax, but if you have a hybrid car, it has a lower cost at £130 per year.
But what if you bought a fully electric car? Then, you get to enjoy road tax exemption. This is something to think about if you want to save money in the long run.
Should you choose a diesel or petrol car?
In terms of fuel economy, diesel cars are better than petrol vehicles. The catch here is that diesel cars are more expensive to buy. If you drive long distances frequently, about 12,000 miles or more, then a diesel vehicle would be the more economical car for you.
Here’s something to remember, though. All diesel vehicles have a diesel particulate filter. This filter eliminates exhaust gases by burning them off. For this to work, the car needs to run above 50mph regularly.
If you don’t really need to drive a lot, it’s best to avoid diesel cars because the filter might not be able to clear itself, leaving you with a costly repair bill. You also can’t remove this filter because it will cause the car to immediately fail the MOT once it’s tested.
Servicing Your Car
Vehicles need to be serviced annually to ensure that they’re in good condition, safe and roadworthy. When servicing a car, the filters, engine oil, and other fluids will be changed.
The cost of servicing your vehicle can vary, depending on the type of service and the model of your car. For example, cheaper ones could cost just £150, but if you have a high-performance car, expect it to be about ten times that cost.
How do you find affordable car servicing?
You have the option to get a fixed-price servicing plan for your car. You may pay upfront or monthly rather than making the payment when it’s time for car servicing. This is a good idea to consider if you’re looking for a budget-friendly way to prepare for this expense.
Another tip is to get quotes for car servicing from several garages. Typically, independent ones are more affordable than franchised garages.
But you do have to ensure that the auto mechanics can service your vehicle according to the manufacturer's recommendation.
They should also only use approved parts in case some replacements need to be made. This is crucial if you want to keep your manufacturer warranty cover valid.
How much does car insurance cost? It really depends on a number of factors, such as the kind of vehicle you’re insuring.
Every car model belongs to a specific insurance group, which will affect insurance costs. Before buying a car, you may want to check how much you need to pay to insure it.
The easiest way to get an idea of the cost is to use price comparison tools online. You can get quotes for various cars with just a few clicks. You can even check if you can change your insurance to your new car in advance.
Consider the Car's Depreciation
Once you drive away from the dealership in your new car, it will start to lose value. Within three years, most cars will only be worth half the price you paid.
How quickly a car depreciates relies on many factors, such as the model of the vehicle, how well it is maintained and its overall condition, any sustained damage, and others.
For example, a saloon may lose about 70% of its value in the first three years, but a hatchback may only lose about 30%.
Usually, cars that are slow to depreciate are more expensive to buy, so this is another thing to think about.
Should I buy an electric vehicle?
It's a great idea to buy an electric car because of the many benefits you can enjoy while driving an eco-friendly vehicle.
If you choose to buy a hybrid or fully electric car, then budgeting for your car would be a lot different. With a green car, you can expect it will be more expensive than traditional vehicles.
However, the electricity you need to run your eco-friendly car will be much cheaper than topping up a conventional car with diesel or petrol. So, you get to save more money in the long run.
Before making big decisions about buying a car, knowing and understanding your driving needs would benefit you.
Do you drive far and often, or only need a vehicle to drive around the city? Questions like this can help you prepare when choosing a diesel, petrol, hybrid, or electric car.
Remember that the cost of owning a car doesn’t stop at paying for its price at the dealership. Consider the fuel, insurance, maintenance, and other related expenses to budget for a car more effectively.
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