It can be a very exciting process to buy a new car, although of course, it’s also one that necessitates you being responsible with your money. Do you know, however, how to set a sensible budget for your next vehicle purchase?

After all, budgeting for a new car isn’t purely about ensuring you can cover the ‘headline’ initial purchase price of a vehicle. That’s because you must also consider whether you can afford to pay for all of the other aspects of a car, such as its day-to-day, week-to-week and month-to-month running costs.

Below, then, are some of the factors you will especially need to think about when setting a budget for a new car.

Work out the basics

Before heading down to the dealership, it’s important to work out the most obvious running costs for any car.

These costs include road tax and fuel. A car’s road tax is easy to work out: the higher a car’s CO2 emissions, the more it will cost you in the first year. Working out fuel consumption is slightly harder. Although sellers have to list an official MPG figure, it won’t necessarily be accurate.

When you test drive the vehicle, have the economy figure displayed on the dashboard. Fuel economy may improve once a vehicle has a few thousand miles on the clock, but it won’t leap from 25mpg to 60mpg.

According to Which?, cars with diesel engines generally have better fuel consumption than their petrol-engined counterparts. But they are more expensive to buy. In order to feel the financial benefit of choosing a diesel over a petrol, you will need to do about 12,000 miles a year.

Servicing and insurance

Make sure you have an idea of the service costs for your chosen vehicle. Also don’t forget that you can check how much your insurance will cost before committing to a deal! Cars that come with all of the bells and whistles will cost a lot more to insure than a low-end model, so it is worth seeing what kinds of cars are in your insurance budget.

Extras

You need to factor in how much extras you want might cost, they can soon add up. For example we paid more to have rear air bags as we wanted the additional safety measure. Whilst other drivers would probably prefer Craft Customs carbon fiber steering wheels. These types of steering wheels are resistant to heat so on hot summer days they don’t feel as uncomfortable to hold when driving. It’s all about priorities and what you are looking for. But don’t feel like you have to pay for all the extras. Salesmen might try and push fabric protection or paint sealant so think carefully before commiting.

While some of these added luxuries aren’t strictly necessary, they do make driving more enjoyable. If you spend a lot of time in your car, you should make sure that you’re as happy and as comfortable as possible. Some added extras can be good for your health, such as seat upgrades that allow you to sit more comfortably and support your back. 

One of the good things about added extras is that, in some cases, you can add them later. For example, you can buy personalised number plates for your car at any time. All you have to do is buy them, then make sure that your car is registered for that number plate. It’s a small change, but it personalises your vehicle and makes it much easier to spot in a busy car park.

Depreciation

As soon as a new car is driven off the forecourt, it is considered used and starts to lose money. Lots of cars are only worth half of their original value after three years’ ownership.

The model you choose has the biggest bearing on how much value it loses. A large saloon can lose up to 70% of its value, whereas a small hatchback’s value may drop by just 30% in the same time period.

It’s good to factor in how much a car will depreciate by into your budget, because exchanging in your current model can add money to the budget on your next vehicle.

Now that you have a better idea of the factors you will need to consider when budgeting for a new car, you’re ready to go shopping. If you’re looking for used cars in Southend on Sea, Reynolds Motor Group can offer you attractive prices on all manner of sought-after vehicle models.