Financing a car isn’t as easy; it is the second most expensive investment after your home. Moreover, it isn’t a one-time investment and requires maintenance and running costs.
Whatever the costs involved, having the ownership of a car significantly adds to your lifestyle. It is one of the biggest goals for all the youngsters, most importantly if it is a dream car, they are looking forward to.
However, before you begin shortlisting the financing options available, all the costs associated with a car purchase must be reviewed.
The Costs Of Buying A Car
The process of purchasing a car may seem simple with just the purchase cost. However, there are numerous other hidden costs detailed below.
Unless you are paying for your car outright by cash, financing will involve interest. Interest rates are based upon the cost of the car, your credit score, the type of car you’re purchasing, and the term of your loan.
However, to achieve the best bargain, you must explore all the financing options and pay as big of an amount as possible as the down payment.
Taxes And Duty
A sales tax or a special tax rate for your car will always tag along with the purchase cost. Moreover, you will be liable to pay an additional amount as a duty in case of an import.
Duty rates are based on the type of vehicle being imported and the cost it. It is mainly paid as a percentage of the value of the car.
Dealership And Title Fee
Title documents, registration, and license plates will also take up a certain amount of money. Again, in the case of an import, these charges can be higher than usual. The cost of registration also varies from state to state.
Investing in the insurance of your car is always beneficial. It can save you from a potential loss in case of an accident. So invest in a reliable plan and pay the yearly charges just as you do for your car maintenance. You may even be required to submit proof of insurance in various places.
Getting your car delivered to you, especially if the purchase has been made overseas, can be pretty expensive. However, the shipping service cost isn’t as high as to let go of your dream car.
Choose for enclosed or open shipping, as per your budget, and get your car safely transported to you. Just make sure you choose the most reliable and hassle-free vehicle shipping service!
Financing Options Available
The feasibility of car financing through various options may differ from person to person. However, a few alternatives to cash purchase are listed below.
- A personal loan from the bank
- Hire purchase agreement with a car dealer
- Credit card payment
- Peer-to-peer loans
Purchasing a car involves high costs. Therefore to dig into details of every expense you incur is essential. Moreover, make sure you are treated fairly and find the best bargain. Such is only possible if you explore various options.