Skip to main content

Lindsey Patterson

5 Expenses to Recognize When Buying a New Car

4 min read


Car buyers who do not first take the time to accurately calculate the total cost of buying a new car are invariably surprised. Many of them only look at the car payment and wrongly conclude the car payment is the total expense.


The very first thing to settle is the question of insurance coverage. Be sure to get an auto insurance quotes comparison. Do you plan to replace the currently insured vehicle, or do you want to simply add the new vehicle to your existing policy? Get the insurance quotes for both options.


Make certain of what the insurance covers. It is always wise to fully cover any new vehicle Do not leave the dealership parking lot until you confirm you are insurance safe.


Real Total Costs

Everyone who has ever bought a new car knows the sticker price on the window is not the last penny they will spend for that new vehicle. There are always add-ons.

Some of them are unavoidable, and some of them are negotiable.


Sales tax is unavoidable, but some of the destination fees can be negotiated. Documentation fees and any fees or charges on your trade-in can be negotiated in most states. By the time you wade through all the fees and charges, they can add up to quite a sum. Be prepared.


Fuel Costs

Fuel costs should never be a surprise. They are posted right there on the window sticker. Just make sure of the grade of fuel your new car uses.

You need to calculate your personal fuel needs if you plan to make regular, extended road trips. Check the window figure to see how many miles they have used for their calculation. Use fuel to learn about ways to save on fuel.


Maintenance is absolutely critical to ensure getting the most out of a new vehicle. Little things like air pressure in the tires can get the most miles out of a set of tires.


Major maintenance like regular oil changes, checking fluid levels regularly, and checking belts and hoses at regular intervals all go into maintaining a vehicle. None of it is free; it either costs money or time.


That old axiom, ‘pay me now, or pay me later’ is a sound operating principle here. Ignoring maintenance is inviting travel catastrophe in the form of vehicle failure.


Parts Cost and Availability

Before you yield to that buy impulse and rush out to purchase that foreign exotic, check parts availability and costs here in the states. Next, check the expense of having the part shipped here.


I think you will either be amazed or very angry or both. If you are willing to spend extravagantly on an import, be equally prepared for those absurdly expensive maintenance and repair bills.


Depreciation and Resale Value

Few items purchased lose value more quickly than vehicles. They rank in the same category with major household appliances and electronics. That old adage of an out-of-sight warranty, out of sight, out of warranty, is not much of an exaggeration.

Your brand new vehicle begins to lose value as soon as you drive it home. Some are worse than others, and some retain more of their resale value than others. As a general rule, most vehicles lose up to 20 percent of their value within the first year.


Check the list here to see if the new vehicle you are considering is one of the slowest to depreciate. Since slow depreciation equals higher resale value, this should be a major consideration of any new vehicle purchase.



These five considerations will make for a much wiser vehicle investment. Since it represents one of the major expenditures of your budget, it is just prudent financial management to get the best deal you can. Remember, the sticker price is not the full story on vehicle costs.