Cars and budgets- Finding a mix that works

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The theory that car owners are financial masochists has been gaining ground recently as the ever-unreliable on road costs take their toll on everyone. Even mechanics are feeling the hot breath of cost on their bottom lines, and it’s a good idea to look at working with a budget that’s both painless and reliable.

Figuring out on road costs

There are multiple issues in on road costs, and all of them have the potential to become big costs.

These are the big factors:

• Type of car
• Age
• Usage
• Fuel economy
• Servicing
• Wheels
• Brakes
• Transmission
• Tyres
• Checkups
• Accessories (GPS, baby seats, hands-free phones, features, etc.)

It’s easy enough to come up with a ballpark figure, but all of these factors can be condensed into one word: Reliability.  An old car which is fuel-economic, properly serviced and maintained is a lot cheaper to run than a new, problem-riddled thing, particularly if that new car comes with a $40,000 price tag and “issues” with its electronics.

Budgeting for cars has to be based on a real world series of equations:

• If you budget for a regular service, the odds are that your car will be costing you less than the dramatic mercy dashes to the service center as it gets older.
• If you plan your driving to avoid the brake, gearbox and steering epics of heavy traffic, both your car and your nervous system will be feeling a lot better.
• When calculating your costs, give yourself a quote on your expected outlay. Now, convince yourself, or not, that you’ve got the budget mix right. If not, you need a new car, one that won’t send you broke.

Budgeting and new cars

When you’re looking for a new car, be as fussy as you know how to be. You can budget selectively, and this is where you have control over what happens and doesn’t happen. This exercise isn’t about what you can afford, it’s what you can’t afford. A liability on wheels is more like risk management than driving, and you can’t really win the battle of the dollars on that basis.

Use exactly the same equations as you did for your old car. Never mind the sales talk, figure out real costs by getting information from someone not making a commission on selling you the car. Ask your local car repairs shop and any reliable car mechanics you know about the models you’re looking at buying, before you spend a cent. If the repairer sighs and your friendly mechanic looks at you pityingly, you can draw the appropriate conclusions.

A final word about budgets for current and new cars

There’s exactly one other thing you need to know about budgeting for a car:

Do not, ever, go anywhere near your income limits for costs.

If a car costs that much, it’s not worth owning. If anything goes wrong with it, it’ll trash your entire domestic budget as well. It’s a car, not a kid, and the expense really does have to be justified.