If a car is too stressed your budget? This may be because the true cost of owning a car is much more than the purchase price or monthly payment. This is only about half the average monthly expenditure of cars. It includes the true cost of the car: first, the payment of the loan. A 5-year loan of $ 20,000 on a car 400/month, depending on the rate of interest. Secondly, insurance (collision, because of the credit) is usually between $ 75-200 per month (depending on thewhere you live). Third, $ 3.00 per gallon gasoline and an average annual usage of 15,000 miles per year costs about $ 150 per month. In the summer of 2007 would be more like $ 200 a month as a gas to be closer to $ 4.00 per gallon. Finally, simple repairs (assuming $ 300 per year, which is conservative, even for a car under warranty), routine maintenance and annual registration fee, add up to another $ 60 per month. In all, ignoring the additional things that you or your car, the averageCar costs between $ 685 and $ 860 per month. I will not even start the possession of a truck! In five years you will pay closer to between $ 41,000 and $ 52,000 U.S. dollars for your car, which is now at $ 4000 dollars spent. Do you feel you are getting the most for your money? Normally you do not have a choice whether or not to drive, but you have a choice, what you need to go and how you drive.
So, when shopping for your next car, affect the actual cost of the car, and what factors should the costs.Owning the car you want is a luxury. A luxury most can not afford, instead, decide what you need. Do you need four-wheel drive? How many in your family? Also, how long to keep the car, as the number of passengers may change before it is ready for another machine. Finally determine before buying what you are willing to spend each month for this car. Let this number to determine the type of car you buy and the price you are willing to pay, and ifall possible, buy used. There is nothing wrong with buying a new car, but if you are trying to reduce expenses, buy used. The intrinsic value of a car is predominantly age independent. As long as it can get you from one place to another it has value and the extent of that value depends on how long that car will continue to serve that purpose minus the maintenance expense to keep it serving. Any price above intrinsic value can be attributed to marketing and personal preference; values considered extrinsic.
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A new car comes with intrinsic value which will decay proportionately with use and abuse, though the vast majority a new car's price is extrinsic and will decay independent of use at an exponential, meaning that they lose a percentage of their value each year. Until there is no value left. For example, if you buy a ,000 car that depreciates 20% each year, after your first year the car is worth, ,000, after the second year it is worth ,800, then ,240 its third year, and after 5 years, worth 53. These numbers are just an illustration. The true depreciation of a car is quite a bit higher (about 28% each year). Typically after the third year, the price of a car starts to stabilize. If you want your car as new as possible and still have good value, buy it after 3 years. If you want as little depreciation as possible, wait until car is at least 6 years old. At this point, the car is old enough that much of the extrinsic value of the car has decayed away, but is still typically free from major physical wear.
How Much Does Your Car Really Cost?
You can gauge how much intrinsic value a car has by how much differences in mileage influence price. For example, if you had two cars of the same make, model, and year; If the first had 120,000 miles and sold for ,000 while the other had 60,000 miles sold for ,000; then, based on the selling prices, the intrinsic value of 60,000 miles is 00. If the market perceives the average life of this car as 180,000 miles, then the first car's intrinsic value is 00, the second car's intrinsic value is 00, and a brand new car had an intrinsic value of about 00 and an extrinsic value of ,000 if bought new for ,000.
Once you have a good gauge of intrinsic value, the next step is to determine what mileage range to buy. This depends on how long you intend to intend to keep the car for and your budget for maintenance. A car with higher miles may fit just as well within your time frame and cost less. For example, if a car model is not expected to last beyond 200,000 miles, and you want to own this car for over 5 years, then you should probably not buy a car with more than 125,000 miles. If you only intend to have the car for 2 years, you can get by with a higher mileage car and pay significantly less initially. The same rule also applies to warrantees. If the car's warranty expires at 100,000 miles and you want to keep it at least 3 years, then you will probably want to buy a car with at most 65,000 miles.
This is a simplistic description of auto pricing as many other factors also influence price. In general, when looking for the right car, remember these three things: first, know exactly what you need; second, know how long you plan to keep it, and third, use not age determines value.
How Much Does Your Car Really Cost?
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