Editor’s Note: This article was originally published in May 2022 and was updated in July 2024 with additional links to other useful blogs.
We need our cars – for work, school, picking up the kids, going to appointments, or just going home! Buying a car is a big decision. A vehicle is more than a one-time investment; it’s a long-term investment. A car is the second most expensive item in your budget, second to housing expenses.
There’s more to the cost of a vehicle than the sales price, including sales tax, insurance, interest on your loan, maintenance, and gas. All these items must be considered when you buy a vehicle. When you purchase a quality used vehicle at America’s Car-Mart, we’ll sit down with you and discuss this so you can make an informed buying decision.
At Car-Mart, our goal is to help you be successful. We want to put you at ease and provide peace of mind with your used car purchase. “The number one question we receive from customers is ‘What’s my monthly payment?’ They’re in buy mode. They want a car, and they want it now,” says Chuck Perry, General Manager, Sherman, Texas.
Chuck Perry, General Manager at Car-Mart of Sherman, Texas, takes time to explain the total cost of owning a vehicle to his customers.
“Customers are eager, excited, and frustrated all at the same time. But we make sure customers understand what their payments will be, as well the other expenses.”
Chuck explains that they’ll walk through a budget sheet listing each customer’s monthly living expenses and discuss the various components of vehicle ownership. “We’ll do a breakdown with our customers because they have to consider more than just the car payment,” Chuck says.
Knowing how much you will spend on your vehicle is important so you can budget accordingly and be prepared for unforeseen emergencies. Here are the components that comprise the actual cost of vehicle ownership:
Fuel
Yikes, this one is tough with the rising cost of gasoline these days. To determine a budget figure for fuel, divide the miles you drive by your car’s fuel economy rating. Then multiply that figure by the price per gallon in your area.
Check out our blog – Save Money at the Pump – to learn 10 tips to overcoming rising gas prices.
Interest on your vehicle loan
When it comes to interest, Car-Mart has one of the lowest rates* in our industry. The interest is included in your monthly payment and factored into the vehicle’s price and the note’s length.
Taxes and Fees
Taxes are a percentage of the sticker price that varies based on your state’s sales tax. Fees include registration, title, inspection fees, and license plates. The price for each of these varies depending on your state.
In some states, Car-Mart is required to submit the customer’s sales tax to the state, and so it’s included in the financing. In other states, the customer is responsible for paying their sales tax to the state. [Check with your local Car-Mart manager for more details].
“You should know that taxes and fees can sometimes be over $1,000,” notes Chuck.
Insurance
Annual insurance rates vary depending on age, marital status, credit score, location, vehicle make, model, year, and body type.
Check out our blog – Understanding Car Insurance – to learn the basics of insurance.
Maintenance & Repairs
Regular maintenance will keep your vehicle in tip-top shape and running smoothly. Be sure to set money aside for repairs each month.
Remember, Car-Mart has you covered with our optional Service Contract Plus – added protection with three tiers of repair service including oil changes and roadside assistance.
Also, check out our various vehicle maintenance blogs:
- 8 Things to Know about Your Vehicle Oil Changes
- 6 Warning Signs About Your Brakes
- Car-Mart’s 10 Basic Maintenance Tips
- 6 Tips to Extend the Life of Your Battery
- The Importance of Wiper Blades
- Check your Four Filters – Air, Cabin, Fuel, Oil
Chuck recommends not getting caught up in the moment of buying a vehicle but fully understanding what it takes to own a car – from purchase to payoff. According to Chuck, 20 percent or less of your monthly income is the maximum you should spend on your vehicle payment and expenses.
“We want to make sure our customers understand and that their finances are right,” Chuck concludes. “We want to make sure they are financially aware upfront of vehicle expenses. The last thing we want to do is put our customers in a difficult position. We want to set them up for success with their vehicle, and that will give our customers peace of mind.”
Explore our blogs on budgeting and auto financing for valuable tips and empowering financial advice:
- Take Control of Your Financial Well-Being
- Get Money Smart for Peace of Mind
- Four Easy Steps to Car Buying and Financing at America’s Car-Mart
Are you ready for another vehicle?
America’s Car-Mart can help. Get pre-qualified and know the amount you’re qualified for before you get to the dealership.
