Understanding The True Cost Of Auto Ownership

The true cost of ownership for an auto is much more involved than just the sticker price in the window. When understanding what owning an auto will cost both today and for the life of the vehicle, a range of factors come into play. Making the right decision when shopping for an auto requires that you understand how these factors will affect your expenses. Some autos with an attractive sticker price might end up costing you more over the lifetime of the vehicle.

Let's take a look at the top four components of the total cost of ownership.

Auto Depreciation And What It Means For You

Depreciation is defined as an auto's loss in value over time. Now this isn't a cost that you pay up front, rather, you see its effects when you go to sell or trade in the auto. Looking at two vehicles, if you buy one at $20,000 and sell it for $5,000 and the other at $25,000 and sell it for $12,500, the first car suffers from a higher depreciation cost. While you paid more up front for the second car, you got a better value when you sold it or traded it in.

Depreciation typically accounts for about half of the total cost of ownership. It is primarily affected by how popular a vehicle is on the used market and how reliable the auto runs.

You can also minimise this cost by holding on to your vehicle longer because depreciation occurs faster earlier in the vehicle's lifetime.

Paying At The Pump: Fuel Costs Add Up

The next largest factor at about 25% of the total cost of ownership is fuel costs. Your kms will dictate how much money you pay at the pump over the years. Since fuel costs are a small but frequent payment, some people don't realise how much it adds up over time. You can easily spend $10,000 dollars on fuel over the course of 5 years.

The best ways to reduce this cost is to purchase vehicles with good economy and high kms. In addition, practice good driving habits to further decrease your fuel consumption. These habits include steady acceleration, leaving sufficient following distance between other cars, keeping the tyres inflated, and staying up to date on preventative maintenance.

Financing Costs

The interest costs associated with financing a vehicle accounts for about 15% of the total cost of ownership. You don't have to understand the intricacies of the credit market to help reduce your interest payments. The best way to reduce this cost is to put more money down when you first buy an auto, to pay more than the minimum monthly amount, and to shop around with a few different lenders for the best rate.

Auto Insurance

Insurance can account for another 10% of the cost of ownership. However, this factor can be more difficult to control since it is primarily calculated based on your age, gender, location, and driving record. You can control the cost by shopping with multiple insurance providers. Plus, insurance costs do vary by vehicle; sports cars are more costly to insure than an SUV packed with safety features.

How to Get the Best Deal When Trying to Sell An Old Car

You may be tired of maintaining the same car for the past so many years and wish to get a good price when you sell it and purchase a new one. Here are some tips on how to sell your old car for a good price.

We are all aware that cars depreciate in value over the years. Visiting a reputed garage near you and get an assessment done on the car to find out the price you can expect for the car in its present condition. Hike the price by a couple of hundred dollars as this will help you with a leeway for bargaining is bound to take place.

Spruce up the car before selling. It is necessary to give your car a little pimping to make it look good. You may need to replace wipers, window glasses or broken knows etc. Check that the carpeting and upholstery are not worn out to get a good price for the car.

Get the car serviced. Make sure to check that the car meets all pollution control and emission norms. Any violation of traffic rules should be set right before trying to sell.

Keep the car records in order. The paperwork should be in order and this includes ownership documents, registration records, insurance documents, pollution control records, records of replaces parts and services and so on. Pay any parking tickets that are due.

Advertise the car. Put up fliers in church bulletin boards, local clubs, and advertisement boards, in grocery shops and local publications and local garage sales. Let them know the brand, make and age of the car and add phrases such as "excellent working condition". At this stage it is not necessary to mention the price but let people know where to contact you for more details.

The car should be available for inspection. People may bring along their mechanics or ask to get the car inspected at a garage that they select. If the requests are reasonable you can go along with it but it is not advisable to let them take test drives on their own as you may end up losing the car to strangers!

Negotiate wisely. It is advisable to be patient and wait for the best price. Do not sound hasty to get rid of the car or people will have doubts about the car. Do not encourage people who make low offers.

Check out the payment mode. Once you have gone through the entire gamut of haggling and finally settling down to a decent price, make sure to check the payment mode. Try to get cash on if not, settle for a cashier's check or money order as personal checks may bounce.

Hand over the documents. The new buyer should get all the documents when you hand over the car keys. This is to ensure that they are the new owners of the car can claim the ownership of the used car.

Hand over the car. It is important to hand over the car completely so that you are not responsible for further liabilities. Make sure to cancel or transfer the insurance policy to the new owner and inform all vehicles departments in the state about the change.

Used Cars Can Be a Blessing

Making the decision to buy a vehicle is a big decision for many people. Most people work hard and they need and want their money to work hard for them. When it comes to buying used cars, people want to find something that fits their needs as well as their budget. Selection is also a big factor for shoppers. Having a wide variety of vehicles to choose from is a major selling point for most people as well.

When it comes to buying a vehicle, people have many things to consider. Is it more beneficial to buy or lease? Are you in the market for a new or a pre-owned vehicle? Will you need to finance your vehicle or do you have enough money saved to purchase it outright? Many people tend to lean toward buying used cars for a number of reasons.

Cost is the biggest benefit when it comes to purchasing used cars. Customers will be more likely to save money not only on the cost of the vehicle but on the financing as well. People are more likely to have a smaller down payment up front as well as a lower finance price. Warranties are another benefit for customers. Often customers can get the original factory warranty transferred into their name if it has not yet expired. If you are purchasing a certified pre-owned vehicle you also have the option to purchase an extended warranty.

Insurance premiums are another benefit that comes from buying used cars. Because the vehicle value is less the insurance premium is usually less. Being able to purchase a certified pre-owned vehicle is another benefit to customers. These vehicles are required to undergo a rigorous cosmetic and mechanical inspection. The purchase of one of these vehicles guarantees the purchaser that the vehicle has not been in any major collisions or had any major damage. Often times there are special financing rates available on these vehicles.

Many customers look for deals that last past the purchase of their vehicle. Many dealerships will offer their customers discounts on oil changes, free vehicle washes, free shuttle service when they bring their vehicles in for service, or periodic discounts throughout the year.

Depreciation in value is another down side to buying a brand new vehicle. A new vehicle immediately drops in value the instant it is driven off of the lot. Most new vehicles will lose at least thirty percent of their value within the first two years of purchase. Customers are able to look up the value of their pre-owned vehicle in a value guide to see what their vehicle will be worth in the future. People can also look into a leasing guide even if they plan on buying. Lease payments are calculated on resale values so it can still give customers an idea of a particular vehicle's worth in the future.

For many people, used cars are what fit best into their budget. Doing research in the beginning can save owners a headache during the purchase process.

Used Cars Shopping

The typical used car buyer views at least a hundred cars, before settling on the one they like enough to sign on the dotted line. That number will increase as technology progresses, because it has now become easier to check for the ideal vehicle online. Getting a used car in British Columbia no longer requires a person to traverse the physical landscape from Vancouver in the south west to Fort St John in the East or from Juneau in the north. It can all be done online.

The Metro Vancouver Area

Within British Columbia, the population is mostly concentrated within the Greater Metro Vancouver area. This covers an area of approximately 1,111 square miles, a small part of British Columbia's 364,764 square miles. A mere 0.3%. In terms of population, British Columbia is home to 4.4 million inhabitants, where 2.4 million of them are located in the Metro Vancouver area - 55%. One way to understand it would be to see that 55% of the population lives in 0.3% of the land area. This leads the assumption then, when it comes to used cars in British Columbia, that there is a high concentration of them in Vancouver and the metro area surrounding it.

Used Cars in British Columbia

Along with supply, comes the ability to find better prices, when searching for used cars. However, scouring the entire metro Vancouver area could prove expensive and the marginal benefit decreases for each additional mile that is traversed in searching for the perfect used vehicle. For those who live as far away as Juneau, it may be worth taking a look at the inventory of used vehicles in Vancouver. Again, for them, while a trip would be worthwhile, it would be wiser to traverse the electronic store fronts rather than to physically make the trip down. In short, shopping for used cars in British Columbia, should be focused on the Vancouver metro area.

Tips to Online Car Searches

Finding a car online has its own set of peculiarities. That doesn't mean that is impossible or inefficient. On the contrary, it means that there are a few rules of thumb that should be followed. First off, start by doing an online search for a particular make and model that is of interest. Understand the characteristics of the vehicle and what are the common problems buyers faced with one that is used, as opposed to one that is brand new. Discard issues that are infrequent and focus on the common problems. If these problems are acceptable, then that particular make and model can be shortlisted.

The second action is to understand the financial aspect of this commitment. Buying a used car can get expensive, if the car is in bad mechanical condition. If the car is above market value, then the loan to price ratio will be too low. This will result in a higher initial down payment and, possibly higher monthly payments. Buying a used car involves a commitment that creates a financial responsibility and an obligation. Choose wisely before signing on the dotted line.

4 Common Mistakes to Avoid When Buying a Car

When you decide to buy a new car, you need to know that this is not a process that you can accomplish in a few days. In order to make the best decision, you need to research your options and get as much information as you can in order to get the best deal. Whether you choose to buy a new or a used car, you can avoid making some common mistakes when making this important purchase decision.

Failing to comparison shop

One of the most common problems that people make is failing to cross-shop before buying their "dream car". If you walk into a dealership and buy the car that you think you need without getting additional information, you will soon regret the decision. Look at different vehicles and avoided being narrow-minded when shopping. Start the research online before you start looking at cars for sale.

Buying unnecessary features

Many dealers will try to get you to buy features or add-ons that are not necessary. When you hear terms like VIN etching, rust-proofing, fabric protectors and others, you do not have to fall for the smart marketing. Unless you have very deep pockets, these features make the vehicle more costly and they will not add much value to it.

Being impatient

Another common mistake people make is settling for the vehicle on the lot because they are too impatient to wait. If you want to find a car that is exactly what you need, you should not hesitate to special-order it. It will not cost you more and you end up getting the specific model that you desire. If what you need is not in stock, the dealers can order it from the factory.

Foregoing the Test Drive

Failing to conduct a comprehensive test drive is another common mistake. Driving the car off the lot and round the block is not a test drive! Experts recommend that you spend at least 30 minutes driving the car and checking to make sure that the seats are comfortable and the visibility is great. It is a good idea to take the car on the roads where you drive every day before you make the final decision.

When you walk into the dealership, you should avoid focusing on the monthly payment. When you focus on the amount, the dealer can easily convince you to add a "few extra dollars" to get different upgrades.

Focus on the car you want and use the information to negotiate the best price. It is a good idea to do your homework before you start shopping, as an informed buyer is harder to take advantage of.