Rachel Cruze: 5 ‘Sneaky’ Expenses People Forget About When Buying a Car

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When it comes to buying a car, the sticker price is just the tip of the iceberg.

Rachel Cruze, a renowned financial expert, shed light on some of the often-overlooked costs associated with purchasing a vehicle during a recent episode of her ‘The Rachel Cruze Show’ podcast.

As Cruze puts it, “You’ve got to be thinking about the overall picture.” Here are her five hidden expenses you may overlook when buying a car.

Added Warranties and Features

Cruze starts by addressing the added costs of warranties and features, particularly with new cars.

“The price…doesn’t always include the fees, the warranty packages, or additional features,” she said.

To avoid surprises, she advises having a range for your overall budget and making decisions on add-ons before heading to the dealership. As Cruze suggests, “Know that going in so that you can stand your ground.”

Vehicle Registration Fees

The second often-forgotten cost is vehicle registration fees. Cruze reminds us that all cars, new or used, must be registered with your state of residency. This process can come with various fees, including emission tests and annual license plate renewals, which can cost anywhere from $80 to $100. These are essential to budget for, as they recur annually.

Insurance Costs

Insurance is a mandatory and variable cost, depending on factors like the car type, driving history, and your age. Cruze emphasizes the importance of budgeting for this expense and suggests shopping around for the best rates.

Maintenance and Upkeep

The fourth hidden cost is maintenance and upkeep.

“Having a maintenance category in your budget…can be a game-changer,” Cruze said.

This expense covers routine services and unforeseen repairs. She recommends setting aside a small amount regularly to cover these costs, noting the importance of being prepared for when your car needs attention.

Vehicle Depreciation

Cruze highlights vehicle depreciation as a significant but often ignored cost. She emphasizes the dramatic loss in value, especially for new cars.

“It’s normal to throw away hundreds of dollars every single month in a car payment on a depreciating asset,” she said.

Editor's note: This article was produced via automated technology and then fine-tuned and verified for accuracy by a member of GOBankingRates' editorial team.

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