The type of car you drive says a lot about you.
It can tell everyone within eyesight that you are horrible at financial planning.
There are many financial considerations you should make before buying a new car. It could cost you a lot more money in the long run not doing so.
Before you buy a car you should calculate how often you drive and where you usually drive. Calculate how much you drive every day, week, and year and whether it’s mostly city or highway driving.
Then you will have an average baseline of how many miles you drive for work or your personal life.
The average person drives 14,000 miles annually. Or about 270 miles per week. But you must also identify what routes you take and whether they are efficient or add to driving times.
The average sedan and larger-sized car have 12-gallon to 16-gallon gas tanks. Trucks and SUVs may have 18-gallon gas tanks. Depending on the model and size of the car, and other factors, the typical car will drive 200 to 400 miles before its gas tank is empty.
If the range of the car does not match your driving habits, then you will waste time on excessive fill-ups and inefficient long-distance traveling.
You should research the auto sales taxes of your home state and every nearby state. The sales tax is the tax you pay to purchase a car on top of the sales price.
The average auto sales tax ranges between 2% to 8.25%. And it could hit double digits in high-cost of living states.
It may actually be cheaper for you to buy a car out of state, so do your research.
Annual maintenance costs
Purchasing a new car is just the beginning of paying for it. You have to keep putting money in a car for it to work.
You have to pay for a car note, registration, licensing fees, taxes, and insurance. And there is the cost of gasoline.
Car components break down all the time, so you must have funds for repairs.
The average annual cost to maintain a large sedan is $8,558. You’ll pay more for larger cars. Foreign-made cars need specialized parts, so you’ll pay more for that too.