Buying a pre-owned vehicle can be an exciting and cost-effective way to get behind the wheel of your next vehicle. After all, a pre-owned vehicle will be more affordable than a new model, and you can find a used car for just about any budget. However, it’s important to take into account all of the additional expenses that come after you bought your vehicle, many of which are recurring year after year.
Here are some tips for budgeting these costs in advance.
First, keep in mind fuel costs. You can calculate the cost of fuel by looking at the average fuel consumption of the vehicle you are about to buy and then multiplying the cost of a litre of fuel by your expected mileage in a given year. So, for example, if a vehicle averages 10 litres per 100 kilometres and fuel is $1,50 per litre and you drive 20,000 kilometres per year, your total cost of fuel for the year will be $3,000 (20000/100 * 10 *$1,50) or $250 per month.
Second, factor in the cost of maintenance and repairs. Ultimately, general maintenance can cost around $1,000 per year on an average vehicle, and if the vehicle you are buying isn’t covered by a warranty you want to have savings leftover. You can also reduce this cost by buying vehicles that are in great condition to start and are known for their reliability.
Third, consider additional costs associated with registration and insurance. Depending on where you live and type of vehicle purchased, there can be significant differences in insurance costs from one model to another, so you may want to research this before finalizing your decision.
Ultimately, you will need a few hundred extra dollars per month to cover all of the expenses listed above, so make sure your monthly payment budget has some wiggle room when you finalize your purchase.