When it comes to buy a new carAgreeing on a price you’re happy with is actually just the first step. Even after You will find out what your monthly payment will be, you have to expect additional costs, such as insurance, gasoline and maintenance. Chances are, you’ll be able to crunch the numbers yourself and get a pretty good estimate of what it will really cost to own that new car you’ve been eyeing. Or you could just let this YouTube channel we found do most of the work for you.
Maie Havens The channel is still quite small, but it is essentially dedicated solely to calculating the estimated cost of purchasing a particular vehicle. Take the Chevrolet Tahoe Z71 for example. The base version with the 5.3-liter V8 has an MSRP of $68,295. When you add in the $1,995 destination charge and about $5,600 in sales tax, you’re probably looking at a grand total of about $76,000 just to get the keys to a Tahoe Z71.
A 10 percent down payment would be about $7,600, and assuming you pay about 8.0 percent interest over 72 months, you can expect a monthly payment of about $1,200. Over six years, that interest adds up to about $18,000. Then when you add in about $175 per month for insurance, between $250 and $275 per month for gas, and a monthly maintenance budget in the region of $75 to make sure you’re prepared if the eventuality happens, If something breaks, your monthly maintenance costs will be up to $30, just over $1,700.
If you assume that 15 percent of your annual income represents a responsible amount to spend on transportation each month, that would mean you would need to earn more than $137,000 per year to afford the Z71 you looked at. However, over the course of the 72-month loan term, you would end up paying more than $131,000 for the privilege of driving this $68,000 Tahoe.
Of course, everyone’s individual situation is different. Maybe you know you can get a slightly better interest rate and be able to afford the payments on a three-year loan. Maybe your mechanic buddy owes you something for saving his life and has promised to work on your cars for free. Heck, maybe you’re the best negotiator in the world and you know you’re not going to pay MSRP. If that’s the case, good for you.
Not every estimate will ever be perfect, but this channel seems like a great way to spend a few minutes getting a rough idea of what owning that new car would really cost. If $131,000 seems reasonable to drive a Tahoe Z71 for six years, then go for it. If that sounds a little too rich for your blood, at least you’ll find out now and not in six years after you’ve already paid it off.