Before buying your vehicle, you need to ask yourself the right questions: new or used? Credit or rental with option to purchase or long term? Ecological bonus or penalty?
The overall cost of running a car varies greatly, depending in particular on the model and the number of kilometers traveled. Excluding the purchase price of the vehicle, the annual budget of a small city car averages more than €3,000 or €250 per month (Including insurance, fuel, maintenance, tolls, parking, but not counting possible fines!). It is therefore a significant monthly charge, to which is added, for many individuals, the cost of financing.
Make your car budget
To estimate the annual cost of using the vehicle you are considering purchasing, start by establishing a budget that will allow you to see things clearly. On the one hand, there are unavoidable costs such as car insurance (depending on the age of the driver, length of insurance, vehicle category, etc.), wear and tear and depreciation of the vehicle depending on its use, and possibly the cost of a loan. In addition, you will have to pay registration fees (registration certificate or “grey card”) which vary depending on the tax power of your vehicle, its age, the possible ecological penalty and the place of registration. In some cases, also plan for the cost of parking, especially if you live in the city.
Added to this are the costs linked to the use of the vehicle such as overhauls and routine maintenance (for example for a small city car, around €900/year) and especially fuel which represents an increasing cost.
Finally, remember to compare this car budget with the cost of renting a vehicle, which can be more advantageous if overall you use your car little.
Buy your car or rent it?
This is one of the questions that arises, especially for those who use their vehicle moderately. In this case, you must take the time to compare Rental with Purchase Option (LOA), Long-term Rental (LLD), or even rental for a few days or a few weeks, during vacations for example. But here, you have to pay attention to the cost of the excess in the event of an accident. There are solutions for total franchise buyback, but they are expensive.
Purchase on credit: things to check
To finance the purchase of a new or old car, a consumer loan must be taken out. This can be a classic loan or an “allocated” loan. The assigned credit finances the purchase of a specific good and cannot be used for a purpose other than that for which it was contracted. Whatever option you choose, you must pay attention to the rate offered, as well as the cost of the guarantees sometimes required. And of course, make sure that this charge does not unbalance your budget.
Insurance: a sometimes heavy task
The car or motorcycle insurance includes a compulsory insurance part and an optional part. The cost therefore varies depending on the type of vehicle but also depending on the level of the guarantee or even the driver’s “penalty” in the event of an accident. Repeated which make the note grow.
