Daily Archives2017 April 16

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While planning to buy a car, you must have come across the terms: ‘Cost of buying a car’ and ‘cost of ownership’. Let’s understand the difference between the two terms.

· Cost of Buying a Car: It involves the retail price of the car that you pay to the dealer in order to purchase it. It is also called the MSRP (Manufacturer’s Suggested Retail Price).

· Cost of Ownership: It means the amount that you need to pay for the car during a year. The cost of owning a car includes the cost of fuel, depreciation, service, maintenance, etc.

Let’s understand the cost of ownership in detail. According to a comprehensive report, the cost of ownership is more than $8,500 per year. Do you believe it is too big a number to keep the car running? Well, here are different aspects that contribute to it:

· Service and Maintenance: The service and maintenance cost of the car depends on the manufacturer and the warranty policy. The rest depends on how you use it. On an average, the yearly service and maintenance cost sums up to $914 including the cost of tires.

· Fuel: Considering that the car travels an average distance of 12000 miles in a year, the fuel price may range up to $1682 for one year.

· Insurance: The insurance payments are constant and you can calculate the cost for the same easily. On an average, the insurance amount is $1115 per year.

· Depreciation: The depreciation rate of a car depends on the purchase price of the car, its current age and its life span. If you use a car to travel a distance of 15000 miles, with normal wear and tear, the depreciation amount will be $3655 per year.

· Other costs: Finance charges and fees related to license, registration and taxes cost around $1334 per year. Car buyers often ignore the registration fees and charges. But, in reality, the costs contribute heavily to the cost of ownership.

· Additional costs: Accessories that you install after the purchase of the car contribute to the expenditure. Also, parking tickets contribute to the overhead charges. The parking tickets may cost you a lot more than you can imagine. Plus, if you live in a metropolitan such as New York City, you will have to pay an additional charge for the parking space.

The cost of ownership shows you how much you need to save for a car. Buying a car is a big responsibility. Plan well and make judicious decisions so that the car doesn’t become a burden for you.

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Source by Kaitlin Miller

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With all the employee pricing being hyped and advertised

on the media I thoughtI would write a short article on the

subject. I have also gotten a lot of questions in emails about the subject.

Here’s the deal: Employee pricing is the lowest price you will

ever be able to purchase a vehicle for period.

Employee pricing is usually several hundred dollars below

invoice.

So how is the auto dealer making any money selling at employee

pricing?

It’s simple… They are reimbursed from the auto manufacture.

For example General Motors gives $1500 to the dealer for every

car sold at employee pricing.

When you combine employee pricing with the rebates your getting

the very best deal possible.

Obviously the dealer is still going to try and up his profit

margin in several other ways.

If you are trying to trade in a vehicle then the dealership is

going to try and offer you even less than he normally would.

Because of employee pricing everyone and their brother is

buying a new car right now and the dealerships are stuffed with

used car inventory. Therefore unless they can “steal” your

trade they are really not that interested in taking in another

used car in their inventory.

If you want to buy a car at employee pricing then this would be

the best time to try and sell your trade in vehicle yourself

and save yourself the headache of muddying the water with your

employee price purchase.

The other question I get asked a lot lately is, “How do I know

I am getting the actual employee pricing?”

They are doing national advertising for employee pricing and it

is coming from the auto manufacture. When the actual auto manufactures come out with an incentive program the dealers

must adhere to it! If they tried to be dishonest and sell you

the car you want above the employee pricing they would be

in extreme hot water with the manufacture, could lose their

franchise, and get sued.

Therefore you don’t have to worry about not getting the actual

employee price if it is advertised. The only time the numbers

can get skewed is when you throw in your trade vehicle which

you owe money on. Again, this is why I encourage you to sell

your vehicle yourself.

Last but not least, just because there are great deals at

employee pricing does not mean you should go out and buy a new

car. If you can’t afford the car or the payments then it does

not matter how good a deal you got.

You’re still putting yourself in financial hardship. Think

before you buy!

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Source by Peter Humleker