Can I Afford to Change My Car?
Tired of your old ride but still wondering to yourself, “can I afford to change my car?” If you can work out a budget, get car finance, or choose to buy a second-hand vehicle, it’s possible to get a better car than your current one. You might just be intimidated by the thought of making such a big purchase. Here are some ways on how to prepare for your car buying journey.
Expenses for Fuel and Road Tax
Aside from the car’s price tag, the biggest expenses to owning a vehicle would be fuel, as well as road tax. Before you finalise any decision when buying a car, take these two into account first.
Keep in mind that if the car has higher CO2 emissions, the road tax will also be more costly. For diesel and petrol vehicles, it could be around £140 annually, while for hybrid cars, road tax could be about £130 every year. If you choose a hydrogen or fully electric car, then you may not have to pay road tax.
Should You Choose Diesel or Petrol?
Diesel cars are more cost-efficient than petrol vehicles. However, the downside to this is their price tags are more expensive. If you cover at least 12,000 miles annually, then you may offset the cost of a diesel car. Otherwise, you may be able to save more by choosing a car that runs on petrol.
Budget for Servicing
It's also crucial to prepare a budget for the car’s annual servicing. The cost of this can vary a great deal, with a minimum of about £150 for each service on a low-cost vehicle. However, if you’ve chosen a high-performance car, you may have to prepare a significant amount for it. The cost could reach £1,000 to get your car looked at by an expert auto mechanic.
A good number of car manufacturers actually offer servicing plans if you’re going to buy a new car. With this arrangement, you may have to pay a monthly fee or you may also pay it upfront. This could make it easier for you to budget your finances because your expenses will be more predictable, especially if you choose to pay a fee every month rather than draining all your budget in one go every year.
Factor in the Car’s Depreciation
As you may already know, the moment you drive a new car home, it will start to lose value. Most cars might only be worth half as much as their initial value after three years of use. There are a number of factors on how much depreciation will occur, the biggest one is the model that you choose.
You may select a slow-depreciating vehicle that will only lose 30% of its value in three years. However, they’re usually more expensive to purchase. If you’re thinking of selling or trading the car in a few years, it’s good to know what you can do so you can minimise the depreciation of the vehicle.
Cost of Car Insurance
Car insurance costs may differ from one car to the next because of several factors, mainly, the type of vehicle you’ll be insuring. See to it that you find out how much the car insurance will cost you on a particular vehicle before finalising your decision. Price comparison websites may help you with this process. You can get quotes for various cars and see which ones best fit your budget.
Should I Buy a Second-Hand Car?
Buying a used car has its own pros and cons. You may get to save a lot of money by choosing a second-hand vehicle since it’s cheaper than a brand new car. However, you may have to factor in the costs for servicing, as well as the potential problems you may encounter down the line.
It could take more time to find the car you like if you’ll go for a used car. Also consider that you might have to do your own checks on the vehicle, from the documents to the engine, tires, paint, performance, and others. It’s also important to prepare yourself to accept some compromises since the car is no longer brand new.
It’s not to discourage you from buying second-hand, but the reality is that it might take more work to find the car that will match all your expectations. So, just be ready and be open to possibilities while you’re shopping for a used car.
Should I Buy an Alternative Fuel Car?
Electric cars might be able to save you a good amount of money since electricity is more affordable compared to diesel or petrol. The downside is you might have to prepare for an expensive purchase because electric cars can be costly initially. But if you’re going to look at the savings you may get in the long run, this just might be the car for you.
Other Costs to Expect
You may also need to factor in the parking permits and charges that you might have to pay for as a car owner. The amount might seem insignificant but they’re still an expense. For example, if you’re in a busy city like London, you may choose a car that can be exempted from the Congestion Charge. Try to check what other expenses you need to prepare for when owning a vehicle.
Hopefully, this list has helped you estimate the costs you’ll incur if you’ll change your car. If you go to an online calculator it will tell you how much you could borrow for car finance repayments of £350 per month for example. It could be intimidating to start working on the numbers to see if your budget will allow you to buy a new vehicle. But it’s a necessity so you can enjoy the convenience of having a well-performing car.
Car financing may also be an option for you so you can buy the car you want. If you finance a car, the cost can be spread through monthly instalments. You don’t have to worry about spending all of your savings on one big purchase. You can save money for servicing, insurance, fuel, taxes, and other related fees. But always fully look into the total cost of getting car finance.
You can check out the best car finance deals from Carmoola and also learn how you can apply.