Why Cars Cost More than their Showroom Display Price

Even if you’d essentially be walking into the dealership with a big bag of money and your intention was to buy your next vehicle cash, the listed purchase price is not the final price of the vehicle. There are maintenance and running costs involved, but we’ll discuss these and many other costs in a bit more detail.

Car finance

So if you’re like most people then you’re not buying your car with a bag of cash to drive away from the dealership with full ownership of it. You’re likely getting it financed via a bank loan, commonly known as car finance, which naturally comes with rather hefty interest rates on repayments.

Just work out how much all the interest will add up to by the time you’ve fully paid off the car and you might want to weep! Unfortunately the average person can’t otherwise afford to buy a vehicle cash and so we’re at the mercy of the banks’ interest rates.

Service and maintenance plans

Service and maintenance plans perhaps form an essential part of vehicle ownership and maintenance, simply because you’d otherwise have to pay out of pocket for breakdowns and replacement of faulty or worn parts. The specific coverage is offered as per the conditions of the manufacturer-issued plans or those which are issued by a third-party, where applicable, but basically a service or maintenance plan is like being able to pay off the maintenance and repair costs as part of your repayment of the purchase price of the vehicle. This then naturally adds to the purchase display price.

Running costs

These are naturally some costs which any car buyer would be prepared for, but sometimes car owners can be under-prepared on account of not being fully aware of the extent of these running costs. Your car could be a serious gas-guzzler, for instance, or it might need some very expensive disposable parts to keep it running.

Auto insurance

If you find yourself in a situation where you’re looking for the services of a local personal injury attorney Los Angeles has a few very good ones on offer, but what very quickly becomes apparent is the existence of an oft misunderstood constituent of motor insurance, which is of course the liability portion of a motor insurance policy. Liability insurance is seldom if at all offered as a stand-alone motor insurance offering, but usually forms part of a standard motor insurance policy which covers both damage (or theft) and third-party claims.

So that’s why auto insurance often works out to be a bit more expensive than what you might have originally anticipated, because your insurance company is essentially working the potential of third-party liability claims into the premiums they charge you. Third-party claims on vehicle damage would otherwise not make motor insurance that much more expensive than it is. It is the possibility of those third-party claims which have to do with personal injury that inflate these costs, because the awarded payouts could run into hundreds of thousands of dollars and in some cases even millions, should it be established that the third-party whose injuries warrant compensation have you at fault.

Author Bio

Gavin Mcgee is a car dealer and enthusiast. Having been connected to cars since his childhood Gavin knows a lot about various cars, their makers, models, servicing and is willing to share his knowledge with others and help them solve any problems they might have related to automobiles and motorycles.