The Hidden Costs Involving Buying a Used Car

car financingSmart consumers know that when buying a used car, the hidden costs make the decision-making process to be more than merely getting a competitive price or even a low monthly payment. You don’t want to buy a car that will cost you a fortune on unnecessary breakdowns and towing service to an auto shop. One way to determine if a vehicle will prove affordable during ownership is to compare vehicles based on selling prices and payment quotes. Apart from price and payment, other variables affect car buying and owning process.

Now that you have done your research and determined your budget, what is the next step? You can avoid the shock of walking into a dealership and getting a wrong deal, but knowing all the hidden costs of used cars, which include the following;

 

Unavoidable Costs

On top of the sticker price, there are a few prices you won’t be able to avoid. A good example is the dealership documentation fee, which is a legal charge that covers the dealer’s document submission fees. Dealership documentation fees vary by state and can range from $200-$800. Another unavoidable fee is the sales tax. However, rest assured you won’t be overcharged. You will also have to pay license and title fees.

 

Finance Charges

budgetUnless you are sufficiently wealthy, you are probably not going to pay the entire cost of your vehicle upfront. In case you are going to finance the paying of your car through a loan, you will have to part with a fair amount of hefty interest charges every month. However, if you succeed, you might be able to talk them down during negotiation. If you are lucky, you might come across last-chance lender where they get bad credit car loans for everyone.

 

Other Add-ons

Most used car dealers try to squeeze every last penny out of you, and this entails tempting you with a few add-ons once you have set your eyes on a vehicle. Some of the add-ons you will have to take charge of include; credit insurance, extended warranties, anti-theft devices, paint and fabric protection, vehicle accessories and pre-paid oil charges and tire-rotation. The dealer might use their sales language to try to upsell you on all these extra add-ons. Unless you are personally convinced, you need these services, stay away from them.

 

Sales Tax

Sales tax is not a hidden fee, and almost everyone knows about that. When budgeting for a used car, you have to factor out this tax, though it is not a big expense. Be sure to spell out what you need to pay a sales tax, to avoid unnecessary surcharges. If the car you look forward to buying is less priced, the less you will pay for sales tax.

 

Fuel and Parking

Whether it is used or a new car, you will have to cater for fuel and parking fees. If you live in big cities with limited parking, it can become a major headache to find a safe place to park your vehicle. Places such as New York City and San Francisco have parking spots costing as much as $300 a month. The other thing you will have to live up to is the high cost of fueling your car.

Leave a Reply

Your email address will not be published. Required fields are marked *