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The Forgotten Question When Purchasing A Vehicle

purchasing a car advice, purchasing a vehicle tips, buying a car advice

When people buy a new vehicle, many times the focus is on negotiating the price and working the financing to get a monthly payment that fits in the budget. If the monthly payment of the new vehicle is the only thing considered when determining affordability, a very important piece of the puzzle is being forgotten.

My wife and I recently walked our son through the process of buying a vehicle. After shopping around, he found a car he liked, that fit our parameters of age, mileage, safety, etc. After the price was settled, and a monthly payment was determined, my wife and son were ready to move forward and buy the vehicle. I put on the brakes, because I knew there was one more call that had to be made, and one more question that had to be asked.

Before buying the vehicle, we needed to find out the cost of insuring the vehicle.

I called our automobile insurance agent, and gave them the make, model and VIN number of my son’s potential ride. I answered some questions, after which my agent gave me how much that vehicle would add to my insurance bill.

Some insurance points to remember when buying a vehicle:

  • Consider the Cost of Insurance : Even if you pay cash, insuring your new vehicle will likely cause your insurance bill to go up. That needs to be considered when determining whether you can afford the new vehicle.
  • Tell Your Insurance Company : Before driving off the lot, call your insurance company to inform them of your purchase. Many times you have a grace period under which coverage is implied, but the sooner you get official insurance the less complicated things will be if an unfortunate accident occurs.
  • My Require Upfront Payment : You’re used to paying your insurance bill once a month, but when you buy a new vehicle your insurance company may require you to pay for a month or even two of insurance.
  • Current Coverage May Go Down : By adding a third vehicle and assigning our son as the primary driver of the new car, the insurance cost of one of our other vehicles actually went down. Don’t just find out what the insurance of the new vehicle will be, find out what your total bill per month will be so you can determine the exact amount your bill is changing.

My son drove home that day behind the wheel of his first car with a smile on his face. It was easy to be happy for him knowing for a fact that we hadn’t over extended our budget to make it happen.

Also, please check out some of my favorites:

5 Key Things to Be Sure You Get Right on Your Loan Application
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Which is Cheaper: Keg or Canned Beer?

Brought to you courtesy of Brock

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Brock

5 Comments

  • When I got my first car, my parents said they would match whatever I saved up. I had about $3,000 going into the process, but decided I didn’t want to spend more than $2,000 because I had to pay any insurance premium increase my car caused – which my parents made clear from the get go. So I got a car slightly under $4,000 and paid the insurance for the entire year up front. They offered the same deal to my brother who totally didn’t take insurance into account and was constantly struggling to make that monthly payment during college. Cars have so many hidden (and not so hidden) extra fees.

  • Discussions of upkeep (tires, oil changes, brake pads) and repairs should be factored also. We always made the kids set up an emergency fund for such items, they put into an account $50 a month, and that $ could not be used for gas, insurance etc. Those items had to be factored into their monthly budget from their small jobs. The emergency fund was for repairs, etc. Insurance had to be part of their monthly budget, not come from the emergency fund. Older cars, more chance for needed repairs. They were also taught to change their own oil, check air in tires, check under the hood, at least every 2 weeks, and we kept a chart and a reminder on their cell phones/calendar. All a part of being a safe, responsible car owner. Another rule, the gas tank could not get below half full so they never ran out of gas. If they wanted a car, they had to sign off on the rules. Buying a car fun and easy, keeping it up, time consuming, takes time, not so much fun.

  • Oh, definitely! When we were last car shopping I was getting insurance quotes online for every type of car we were considering. (Insuring a Subaru – more expensive than Toyota, FYI)

  • I’ve made this mistake with the first car. Luckily, insurance was affordable! So, when I knew it was time to switch cars, I took potential costs of insurance into serious consideration! Making insurance cost a criteria can actually narrow down your choices. It really helps if you’re unsure what type of car you’d want to drive and can also afford.

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