Whilst buying a new car is exciting, it is important to consider how much the vehicle is going to cost you as it is a significant investment. Lookers plc offer their advice on how to budget for new cars, helping you prepare yourself for a new car.
The ticket price is the first cost to consider, and how you plan to pay that cost is another factor to deliberate. There are several ways you can finance a new vehicle today, from cash purchase and PCP to leasing, HP and contract hire – which method is best suited to you? Are monthly affordable payments best, or do you have the cash saved to pay off the vehicle upfront and avoid paying additional costs in interest?
The cost of the vehicle however, is not the only cost you will incur. Running costs such as fuel and tax, servicing and insurance must also be taken into consideration, as these are costs you will incur along the way, after driving away in your new car – costs which sometimes can be forgotten and come as a surprise when the bill comes in.
Fuel and Tax
Both costs vary depending on the vehicle, so it is critical that you know how much each of these will cost you. Road tax is simple to work out once you know how. The CO2 rating of a car will determine its tax band, which will determine how much your annual road tax will be. It is illegal to drive an untaxed vehicle – most dealerships will ensure your vehicle is taxed for a full year before you drive your new vehicle away! After that, it is up to you to renew your road tax each year, which can be done easily online.
Fuel costs are difficult to calculate, however, most vehicles will have the mpg information available on purchase so you can see how many miles to gallon you get from your vehicle.
Diesel or petrol? For many drivers, this is an easy decision, for others, the decision requires a little more thought. Diesel models are generally more efficient than petrol. Diesel cars therefore generally cost more than petrol cars, and diesel costs more at the petrol station. If you are going to be driving more than 14,000 miles a year, a diesel car will generally make more financial sense as you will have made back your money in efficiency savings.
Servicing and maintenance
Making sure your vehicle is regularly serviced and has a valid MOT is vital to the healthy and efficient running of your vehicle. If there are any repairs needed, you should have these fixed as soon as possible. Warranties usually help cover the costs of maintenance and repairs. Service plans are often an affordable way to pay for your servicing on a monthly basis to avoid paying out the costs in one sum when your servicing is due. You might also want to consider signing up for a free reminder service so that you can avoid incurring any costs for late MOTs or breakdowns.
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