A car purchase is one that should be carefully considered; you want to explore all of your options and make your decision when you’re absolutely sure on the make and model that’s right for you, while sticking to a specific budget that you’ve set in place. But when it comes to purchasing a car, there are a lot of hidden costs that many buyers frequently overlook. Some of these hidden costs include:
Just like any loan or line of credit, there is interest to consider. If you’re financing your car, remember that a portion of your monthly payments will go towards interest. In the end, you end up paying a lot more money for your car than if you were to purchase it outright and in cash. As such, you might want to save up enough money to buy your car without a loan, even if it means opting for something cheaper.
Decrease in value
Sooner or later, you’ll probably want to sell your car or trade it in. Cars are almost always depreciating assets that go down in value the second they’re purchased, and many car buyers are shocked to discover this. This means that you could end up upside down in your car loan, and owe more than you received from the sale. Even if your car loan is paid off, it’s unlikely you’ll get what you bought it for initially.
If you’re buying an in-stock car from a dealership, it might be loaded with features and other extras that you don’t even want, but that you’re paying additional for. Even if you do want those things, you could potentially add them on later, rather than purchase them at a higher price from the dealership and finance those extra expenses. Instead, try to get the dealership to bring a car in from the manufacturer (or from another dealership) that only has what you need, so you aren’t paying extra.
There are a lot of miscellaneous fees that car buyers are surprised to find out about, such as title fees, vehicle registration fees, and so on. These fees will vary by state, and also can depend on various factors, such as whether you’re purchasing a new or used car. Research how the different fees would affect your purchase in your state, which can help influence your decision if you’re torn between a few different options.
Do you need money to buy a car, and you’re hoping to avoid a car loan? Peachtree Financial Solutions may be able to help if you’re receiving structured settlement annuity payments. By selling some or all of your future payments to Peachtree, we can send you your money sooner, in a lump sum. Many of our customers have used their lump sum payment from us to purchase a car, and we’d love to help you do the same. Contact Peachtree Financial Solutions today!
Nothing above is meant to provide financial, tax, or legal advice. You should meet with appropriate professionals for such services.