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Saturday, September 23, 2023

The True Cost of Owning a Used Car: Beyond the Purchase Price


Buying a used car is one of the best ways to save money. It helps you get behind the wheel of a vehicle in good shape without worrying about challenges that can happen with newer models. But don’t forget that there are other costs associated with buying a used car, and it pays to do your homework before you take the plunge. Besides the upfront cost, you have to consider the insurance, registration fee, depreciation, maintenance and repair, and fuel costs. 

Repair or Replacement Costs 

Maintenance is crucial in calculating the actual cost of using a used car. The repair parts and labour costs depend on the car’s brand and model. Some models, like Porsche Cayenne and BMW 5 Series, are more expensive to maintain than Toyota and Honda.

Most European luxury cars are more expensive to maintain in the long run. A vehicle with low reliability will require more frequent fixes, which worsens the problem. Though you cannot precisely tell how much it will cost to repair a used car in the long run, it helps to check the dependability score of the vehicle on platforms such as J.D. Power. 

If you’re unsure how much maintenance your car needs, ask friends and family members who have cars similar in age and model. You can also check out online forums where people share information about their cars’ repair and replacement needs. You can also contact the manufacturer for any vehicle maintenance concerns.

Depreciation and Taxes

During the first five years of ownership, cars depreciate between 15 and 20%. More expensive vehicles depreciate faster than cheaper cars. Use an online car depreciation calculator to know how much a used car is worth. It will also help you estimate the yearly cost of acquisition.

In addition to depreciation, you have to factor in the applicable taxes and fees. Luckily, you don’t have to pay a provincial sales tax in Calgary after buying a used vehicle from a private seller. You’ll only pay 5% percent as a goods and service tax when purchasing used cars Calgary from a dealership.

Insurance and Registration Fees

The insurance premiums may be higher in Calgary than other Alberta cities due to higher traffic, population, and other risks. Always get quotes from different providers before settling for one. 

 your car insurance needs will differ significantly depending on where you live in Calgary. Because of the unpredictable weather, it is good to have a plan covering more than legal driving basics. Ensure you have windshield protection, third-party liability, and comprehensive cover. 

Registering a used car is the same as licencing a new one. A car dealership handles the whole process, but you and the seller must sign a bill of sale at a registry agent in Calgary for a private sale. Then you can complete the transfer of ownership. The registration fee depends on the type of vehicle, with off-road vehicles and cars attracting different fees.

The cost of acquiring a used car revolves around registration, insurance depreciation cost, and maintenance. Add these to your monthly payments, and you’ll have the exact cost of maintaining and running it. Generally, the higher the price of a used car, the less it takes in the long run. A used car shouldn’t cost more than a new one because it will still cost you more to keep it. That’s why you must determine the true cost of ownership before signing a deal.

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