Car operating costs are as important as price

March 01, 1992|By Glenn Burkins | Glenn Burkins,Knight-Ridder News Service

Buying a car is a major financial commitment. So when shopping for that special ride, you should consider more than the sticker price.

The total cost of operating a new car for five years -- insurance, depreciation, maintenance, repairs, fuel, financing, taxes and licensing -- often can exceed the purchase price, says the Institute of Certified Financial Planners, a Denver trade group.

For example: You could spend $20,000 over five years to operate a $15,000 car.

Operating costs will affect how much money you have for other things, such as vacations, saving for retirement, eating out and investing. Therefore, it's important to consider the whole picture before you buy.

More expensive cars usually cost more to operate. But there are times when higher-priced wheels may be cheaper to own. For example: If one car costs just $1,000 more than another, it may be cheaper in the long run to spend the extra money if the higher-priced car gets considerably better gas mileage.

Depreciation is another important factor. Look for cars that historically have a high resale value. That could make a big difference when you need to unload the car down the road.

Also, go to a library and read driver-survey reports to get an idea about maintenance costs for specific makes and models.

* LOST AND FOUND -- Your favorite uncle always said he had a life insurance policy that named you beneficiary, but when he died, it was nowhere to be found. Maybe the American Council of Life Insurance can help. The agency has a free service to help people find missing policies. Send a stamped, self-addressed envelope to 1001 Pennsylvania Ave., Washington, DC., 20004-2599.

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