For most people, buying a car is a huge life event and a major financial decision. It takes a lot of thorough planning and thought, as well as some serious budgeting before you commit to the purchase.

However, a mistake that many people make is failing to budget for every aspect of car ownership – which is a lot more than just taking care of your loan and keeping it full of gas. There are lots of other expenses that you’ll need to consider, and a lot of these will differ depending on what type of car you choose to buy. This is why you need to consider every aspect and think carefully about what you can really afford to spend overall.

Loan and Interest

Of course, the main expense is paying for the car itself and naturally, this isn’t something you’ll forget to plan for. However, there are a few different ways to pay for a car, the most common route being to take out a car loan.

Your decision here will impact you financially for a few years – paying cash will likely leave your savings depleted but leave a lot more room in your monthly budget. However, taking out a loan will usually allow you to make a better purchase, but keep in mind that interest can add up dramatically over the years.

Routine Maintenance

When you own a car, you need to pay to take care of it. You could choose to save up for this monthly and pay for it yourself (usually once a year) or take out an extended service plan to have it covered.

If you choose this option, it’s best to make this purchase from the manufacturers themselves, such as by getting a Ford extended service plan for your Ford vehicle, or a service plan directly from Jeep if that’s what you own. This is the best way to ensure the best quality service and original manufacturer’s parts.

Damage and Repairs

Even if you have an extended service plan, you’ll still need to consider what you’ll do if there are repairs that need to be made that don’t fall under the general routine maintenance and might not be covered by insurance.

In this respect, you can never really know exactly what might happen and how much it could cost. This is why it’s important to have an emergency fund saved up for crises such as these.

Auto Insurance

Of course, to protect your car that’s already costing you so much, you need to take out a good insurance policy. Budgeting carefully for your car insurance is an important thing to do since many realise that the insurance is a lot more expensive than they expected.

Auto insurance premiums will depend on many factors such as the type of car you buy, the age of the car, your own age, your history with insurance, and other determining factors. Talk to a salesperson and insurance companies and try to get an estimate before you commit to a specific vehicle.