2. Calculate the cost of ownership
The number on the price tag is only the tip of the iceberg. You’ve narrowed your choices to two, but you can’t seem to decide which one is really the better deal. One way to find out is by calculating “the cost of ownership” and adding it to the money on the price tag. In reality here are the factors that will determine the true cost of the car:
Point of sale price.
Cost to finance – The amount of interest paid over five years.
Taxes and fees – The total of all sales tax, fees and registry costs each year.
Insurance premiums – The average cost of insuring the car.
Fuel – How much you have to pay for the type of fuel that the car requires: regular or premium gasoline or diesel fuel. To calculate cost of fuel: miles driven / miles per gallon x price of gas per gallon.
Maintenance – the total cost of performing all the scheduled maintenance found in the vehicle’s owner’s manual.
Repairs – the projected cost of fixing common mechanical problems for this vehicle. A wise way to avoid unexpected repair expenses is to buy a Certified Used Car (CPO). These cars have been inspected and certified. They have an extended warranty and special add ons. You may check out VinAudit partner CertifiedCars.com to find great deals on certified used cars.
Depreciation – Resell and trade in value in 5 years. Normally, it is around 5 thousand dollars depending on the model and condition.