Top 10 Unexpected Expenses of Buying a Car

Ever since Karl Benz test drove the first motor vehicle, people have had a fascination and love for cars that nears obsession. Today, there are millions of cars on the road in the U.S. alone. If you intend to be one of those car-owning drivers, there are some hidden expenses you need to know about before heading to the dealership.


Getting a loan for that new car? You may need to have car insurance before you can drive off in your shiny new ride. The lender has put a lot of money on the line and the last thing they want is for you to get in an accident, especially if there’s no insurance coverage. When you’re comparing auto insurance premiums keep in mind rates can vary based on a number of factors. The vehicle you decide to buy is a big one. A less than perfect driving record may mean you need to get an SR22 quote. Location is another factor that influences the cost of coverage.


If you want to enjoy the thrill of owning one of the most expensive cars in the world, you’ll need to add a hefty tax bill on top of the sticker price. Like everything else, you have to pay sales tax on a vehicle purchase. On a purchase that size, the cost can exceed annual property taxes on a home. Each state sets their own sales tax rate and the local county sometimes tacks on an additional charge. Don’t forget to file away all of your documentation. You may be able to get a tax deduction to offset some of the costs.

Registration Fees

All vehicles are registered with their state DMV after a sale. Even though it’s the state department wanting the registration information, you have to pay a fee to give it to them.

Title Fees

States also commonly require that there be a title that establishes who legally owns the vehicle. Titles are issued by your state DMV.

Other Dealership Fees

Depending on where you live and the dealership there can be a number of other random fees connected with the sale. A few examples include dealership preparation fees, marketing fees, and documentation fees.

Loan/Finance Charges

Do you have $33,560 lying around? That was the average price for a new vehicle in 2016. Many people make a down payment and finance the rest. You’ll pay interest each month on the car loan, but you’ll also pay finance charges when the loan is executed.


The base price is rarely reflective of the vehicles seen in ads and featured on the showroom floor. Auto manufacturers create a ton of upgrades and extras that jack up the price. Before taking off to test drive a vehicle, ask about the cost of additional upgrades. You may find that the vehicle you’re about to drive is going to be more than you originally expected to pay.

Extended Warranties

Many new and some used vehicles come with warranties, which are nice since they give you a little financial peace of mind. But don’t be surprised if the dealership tries to sell you additional or extended warranties.


Vehicles are complex pieces of machinery that need a tune-up every once in a while to keep running smoothly. Even though some maintenance should be done regularly, many people forget to factor in the costs. They also fail to consider that some types of vehicles are more expensive to maintain than others. Drivers can expect regular maintenance to include oil additions, oil changes, tire replacement, brake pad replacement and air filter changes. Some dealerships offer maintenance packages when you purchase, but don’t assume they’re the best price. Do your homework first and you may be able to negotiate the price down.


While this isn’t a direct expense, it is something that should be considered when weighing the financial feasibility of owning a car. The second a new car leaves the dealership’s lot it begins losing value. Those who want the best value tend to buy used, low-mileage vehicles that have only been owned by one person.

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