It’s no surprise gas mileage is at the top of consumers’ minds when shopping for a vehicle. According to Time Magazine’s Everyday Money, several U.S. states experienced a modest gas-tax increase as of Jan. 1, 2017.
The current national average for gas is $2.29 per gallon, according to AAA. That's 29 cents more than the national average at this time last year. Along with thinking about gas prices when purchasing a vehicle you should consider the total impact a vehicle will have on the wallet before making a final purchasing decision.
According to the Federal Trade Commission (FTC), purchasing a used vehicle can save consumers a lot of money, but whether buying from an individual or a dealer, it’s important to do some homework.
The FTC suggests getting an independent review of a vehicle's history. Check a trusted database service that gathers information from state and local authorities, salvage yards and insurance companies. For example, for a fee, the Department of Justice’s National Motor Vehicle Title Information System (NMVTIS) offers information about a vehicle’s title, odometer data and certain damage history. Consumers can also investigate with a Vehicle Identification Number (VIN). The FTC also suggests test driving the vehicle on a variety of roads in different conditions and talking to the previous owner if possible before negotiating a purchase.
According to DMV.org, the top mistakes consumers make when purchasing a vehicle include not shopping around enough, forgoing a test drive and overlooking the cost of vehicle maintenance and repair. Another important factor is a mechanical inspection, which DMV.org advises could save a consumer thousands of dollars in unexpected repairs down the road.
Car Buying Tips:
Use your tax refund – The more money you’re able to put down on a car, the smaller the loan and ultimately, the less you pay in interest over the life of the loan.
Get pre-approved – Before car shopping, get pre-approved by a credit union. This will give you more power to negotiate on the purchase price of the vehicle. Pre-approval also tells you how much you can afford and what type of monthly payment you will have.
Budget ahead – As a rule-of-thumb, do not allow a monthly vehicle-loan payment to exceed 12 to 16 percent of gross monthly income.
Consider the total cost of ownership – When car shopping, consider the cost of insurance and maintenance. Also, keep in mind that a high-end vehicle typically costs more to insure and to maintain.