One of the biggest expenses that individuals face is the cost of transportation. Besides paying for a vehicle itself, there is maintenance, fuel, repairs and other costs that can add up fast. That’s why it’s important to be educated on getting the most out of your vehicle without spending a fortune. Here are some budgeting tips to cover the primary aspects of vehicle ownership.
Private Seller vs. Dealership
The advantage of buying from a private seller is a lower initial price and there aren’t typically ongoing payments. A downside is that you don’t always know the complete history of a vehicle and there is an inherent level of risk involved. When choosing a dealership, it’s common to pay higher prices, but your odds of getting a lemon are considerably lower. This is especially true when making a purchase from a reputable dealership that wants to maintain credibility within the community.
According to USA.gov, the Federal Trade Commission requires dealers to post a Buyer’s Guide in the window of each used car or truck on their lot. This will explain whether or not a vehicle comes with a warranty. If you know a reputable private dealer with legitimate references that has a history of quality, you can probably save money by purchasing a vehicle through them. Otherwise, going with a traditional dealer is a smart choice because you’re likely to spend less in the long run. If you’re buying a used car, the FTC has some helpful tips for getting a fair deal. DriveTime is a dealership that can help you find and a quality vehicle and manage your account.
What an Extended Warranty/Protection Plan Covers
It’s important to stay protected in case your vehicle experiences serious issues later on. That’s why many consumers opt for an extended warranty/protection plan to avoid getting hit with excessive repair costs. When it comes to what contracts cover, there are two primary types. There are the less complete warranties that strictly cover breakdowns, and there are the more complete warranties that also cover normal wear and tear.
In terms of what isn’t covered, the DMV states that a policy won’t usually pay for expenses associated with exhaust systems, tires, air bags, batteries, light bulbs, glass, paint, moldings, shocks, and brake rotors. Regardless of your warranty, you as the consumer are responsible for these minor replacements and repairs. Accordingly, it’s important find a suitable policy and make it work for you.
When to Find a New Vehicle
Although the cost of repairing a vehicle is often less than the cost of buying a new one, there eventually comes a point when you’re better off making a new purchase. While each situation is different and there isn’t an end all be all formula for making a choice, there are a couple of factors that can assist with your decision. One of these factors is taking into account whether the repair will cost more than half of your vehicle’s market value. If it’s less, then you should generally make the repair and keep your vehicle. If it’s more, then it’s usually smart to get a new one.
The other factor involves predicting how much longer your vehicle should last after having a repair. If it’s an isolated incident where you can expect a few more good years, then a repair is probably worthwhile. Otherwise, if it may only last a few months, then you’re likely to be better off paying for a new vehicle.
Post by Carl Bradley