Buying a Car? Take These 4 Steps to Ensure You Save Enough
Written by
Cindy Lamothe
Edited by
Cory Dudak
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If you’re in the market for a new car — the prices can seem exorbitant, to say the least.
Experts like Kelley Blue Book, told NPR that the average price for a new car was $48,763 as of March, compared to used vehicles costing an average of $26,510. Prices have skyrocketed due to the post-pandemic supply chain and automakers focusing on bigger, more luxurious, pricier vehicles.
Whether you’re planning for an upgrade or buying your first car, start saving before you decide to purchase. Here are some steps you can take to ensure you save enough.
1. Research the True Costs of Car OwnershipÂ
The first thing to remember when buying a vehicle is that the overall expense of owning a car extends beyond its initial purchase price. Take, for example, a base model Tesla Model 3 electric vehicle (EV) with a price tag of $39,999. Surprisingly, its total cost of ownership compares favorably to that of a Toyota Camry, which is priced at approximately $25,000. This is because the Tesla requires less maintenance, consumes cheaper energy, and is eligible for government incentives.
2. Consider Fuel vs Electricity
Gas prices have had significant fluctuations recently, with California experiencing a peak national gas price of $4.88 per gallon in April 2023. In electric vehicles (EVs), charging expenses can vary. While some charging stations provide free electricity, others may charge more for a similar amount of energy than gas.
Calculating an adequate budget means you must consider factors like your driving habits, your car’s fuel efficiency, and the cost of electricity.
3. Set Up a New Car Fund
Gas prices have had significant fluctuations recently, with California experiencing a peak national gas price of $4.88 per gallon in April 2023. In electric vehicles (EVs), charging expenses can vary. While some charging stations provide free electricity, others may charge more for a similar amount of energy than gas.
Calculating an adequate budget means you must consider factors like your driving habits, your car’s fuel efficiency, and the cost of electricity.
4. Think of Selling Or Trading Your Current Car
If you’re already a car owner, selling your vehicle can be a great way to optimize your funds, as it can serve as a potential means of securing a substantial down payment.
You can also decide to trade in your current car for greater convenience. But choosing this option has pros and cons you’ll need to weigh. For example, opting for a trade-in means you’ll receive a lower value for your vehicle. Dealerships may also need to be more flexible in negotiations regarding the car’s price with a trade-in. On the upside, it’s worth noting that they’ll typically manage all the necessary paperwork and legal hassles, which can simplify the process for you.
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