Personal Finance Lesson 93: Car Essentials

There are several things that are important in cars, and the brand, look, and comfort of it is at the very, very bottom of the list. But the things that do come up first are the following: Reliability, low operating cost (e.g. fuel economy), safety, and capacity (trunk size).

Then you have to consider the cost of ownership. Fuel costs is a big factor in the cost of the car. So is the interest on the loan. Preferably, it should be as low as possible. Insurance and insurance premiums are also things that can significantly add up to the cost of a car, and so do maintenance and repairs. Another factor that comes in is where you live. If you live in mountainous or hilly terrain, then your car is going to spend a lot of gas climbing them. Where I live, here, in Texas, the estimated annual cost of owner ship is $3,078. It will be different for different states.

Also, you have to remember that it takes a long time for you car to be considered “vintage.” Before that happens, it’ll only depreciate in its value. So you have to know that your car is losing value, and adding to the cost of owning it.

Posted in Car Finances, Personal Finance

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