Careful consideration of the full cost of owning a car before you buy it isn't just the smart thing to do – it's the only way to be sure you can actually afford the vehicle you've got your eye on. After all, buying a fancy car feels great, but it's not so much fun when you get to the pump and can only afford to put in $20 of petrol at a time because you’ve overstretched your budget.
Total cost of ownership: choosing your next car with confidence
When deciding which car to buy, it's important to think beyond the purchase price and look at what it will costs you over time. That good feeling about the 'great deal' you got quickly disappears if the cost of running your new vehicle skyrockets. Price is important, but it shouldn’t override other considerations like the car's safety characteristics, flexibility, fuel efficiency, reliability and build quality. These things all help determine the ongoing cost of owning your new car, and whether you really got a 'great deal'. In a nutshell, short-term gain on price can sometimes mean long-term pain on everything else.
12 Things to Consider
Initial price
This is pretty straightforward. What you pay for your car matters and feeds directly into other cost factors.
On Road Costs
It's easy to forget while you're having fun buying a car, but we all need to register and licence our vehicles, make sure they have a current WOF, and have paid our Road User Charges if it's a diesel.
Finance
If you need to borrow money to buy your new car, be aware of the total cost of financing your vehicle. Consider your options carefully and be aware of the true finance costs. Remember to get the appropriate advice for your financial situation.
Vehicle insurance
Premiums can vary for similar cars. Check how much insuring the particular model you're interested in costs. Some vehicles are at greater risk of being stolen and cost more to insure.
Depreciation
Sometimes forgotten, depreciation is a key cost of owning your car. A car that ‘holds its resale value' will cost you less over time because you'll be able to sell it for more when it's time for a new vehicle.
Quality
Quality cars like Toyotas hold their value because people know they're well constructed, and reliable.
Reliability
Unreliable cars spend more time off the road. This cost is felt not only in the back pocket but also in the disruption of not having a usable vehicle.
Servicing costs
Some cars cost more to service than others. Bear in mind the engine design, availability and cost of parts.
Servicing locations
Being able to easily talk to an expert on your vehicle can come in handy. Remember to consider what sort of approved dealer network is available for the make of car you're interested in.
Parts supply
Is the manufacturer of your car committed to making parts available, and are they easy to source?
Fuel efficiency and economy
Simple: the more fuel your car consumes for every kilometre you travel, the larger the drain on your finances.
Sustainability
Fuel use and vehicle emissions are just part of your car's impact on the environment. Design, production and distribution methods and reliability are all hidden factors that should be accounted for if you want an accurate picture of a vehicle's environmental footprint.
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