Sticker price is just the first cost of owning a car


Prices for new and used cars have skyrocketed over the past two years and the market is competitive. But the price of the vehicle is not the only cost factor. Be sure to be prepared before you buy to ensure you find the right solution for your budget.

Here are some other very important factors you need to consider before committing to any specific purchase.

fuel economy

In the age of high gas prices, MPG is at the top of everyone’s mind. While a slightly lower rating might seem like a decent compromise between vehicles, in the age of five-dollar gas, that difference can have a substantial effect on your wallet (and the rest of your household budget). Before choosing this gas guzzler, make sure you’ve factored in the extra costs of filling up every few weeks. Get ready for sticker clash.

Hopefully gas prices will stabilize and come back down to non-crisis levels, but predicting when that change will happen is anyone’s guess. Make sure you can handle a few months of freakishly high prices if you’re still determined to get a set of wheels with below average MPG. Now might be a good time to consider investing in an electric or hybrid vehicle, which can protect you against future gas swings.


Depending on your vehicle, these costs can add up very quickly. Once you’ve decided on the type of vehicle you need, pay close attention to what warranty options are included, any extras available, and then spend some time researching online. A few minutes of digging can tell a buyer whether their next dream car is a well-oiled machine or not.

There are thousands of reviews. Check out the top-rated models for the type you’re considering and make sure the value matches the price. A bit more sticker cost may be worth it for a car that runs smoothly for years.

Vehicle type

What kind of driving time do you plan to put on the car? Is this a transport only vehicle? Do you work outdoors and need a pickup truck that can take some serious knocks? Maybe you need an SUV for a growing family, two big dogs, and the ability to clean the inside as easily as the outside.

While it’s tempting to consider buying a larger vehicle for “just a little more,” shopping on a budget means consumers have to be honest with themselves about what they really need. If it’s a second vehicle, only to be used for trips to and from school or the office, maybe electric is the answer? Initial cost premiums are now more affordable as green vehicles become more common. If you need (or absolutely want) off-road capability, this option will determine the rest of your purchase.

Being in the military can make things more complicated when it comes to considerations. The car that was perfect for one place may not be suitable for another. In addition to all of the above factors, any responsible buyer should know how much vehicle they can afford. Navy Federal Credit Union‘s auto loan calculator can help you see what your car payment might be. Once you have tentatively found your dream car, you should get a copy of the vehicle history report.

If you’re like most car buyers and don’t have enough money to buy a car, you’ll need to get a car loan. This is where your credit score comes in. Many factors go into your score. Essentially, it’s a rating that tells lenders how likely they are to get their money back if they lend it to a certain person. Regular payments and low credit usage (the part of your credit limits that you actually use) will earn you a higher score. Late payments, defaults and very high debts will reduce it.

The higher your score, the better (lower) your loan interest rate is likely to be. A very bad credit score is 300 to 579 (out of 850). Anything above 800 is exceptional.

Regardless of your score, anyone considering buying a vehicle should get their score as soon as possible. Most of us don’t check regularly, and a score below expectations will seriously limit your buying power when you start looking to buy. With a few months of planning, you can put effort into increasing your score by consolidating and paying off your debts. Then, when it’s time to apply for that loan, Navy Federal Credit Union offers great rates that can help you keep more money in your pocket as you navigate the road.

Do your personal finances a favor and take the time to figure out exactly what you need and don’t need when buying a new or used vehicle. Armed with this knowledge, set a budget, calculate your credit score, and if there’s work to be done, make a plan and stick to it. Ending up with the wrong purchase could have consequences that could impact your finances, not just your stress levels.

This article was sponsored by Federal Naval Credit Union.


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