How much does a new car really cost?

Published on Jul 08, 2012
How much does a new car really cost? Image

Looking for a new car can be an exciting activity. With so many great bargains nowadays, deciding which car is a good fit for you may be challenging. However, it is important to remember when purchasing a new car the base price may appeal to you at first glance, but there are hidden automobile costs which are important to consider before making your decision.

Upgrade Packages

Firstly, when viewing the base price of a car you may be interested in, remember this may be the price of the car with a manual transmission. Many drivers in North America do not know how to drive a manual car, and if this is the case you will need a version of that car with an automatic transmission. This will usually cost you a couple extra thousand dollars. However, not all car companies charge for automatic transmissions as many have decided to make automatic transmission standard on their base models. Common packages offered on new vehicles nowadays include navigation, leather seats, sunroofs, and bigger wheels and/or rims. These options usually cost slightly over or under a couple thousand dollars each, but can add up in a hurry when choosing to purchase a few of these options. Luckily for consumers, these features are often offered in packages that will save the customer money in comparison to purchasing these options individually. These upgrades on normal consumer cars (usually cars under $50 000) are often standard features on expensive luxury models, such as with more expensive models of Mercedes Benz, Audi or BMW automobiles. However, add ons are also featured on luxury cars and tend to cost much higher than features like leather seats and navigation. These are usually more high tech features such as a rear view camera, a panoramic sunroof (in comparison to a single sunroof), a longer wheelbase for more interior legroom for passengers and rear seat entertainment packages. Generally, any new car you plan on purchasing will have additional packages offered which will always increase the base price significantly.

Many times, when viewing a commercial on television the base price of a car will be shown but the car displayed in the commercial is the top model. For example, the base model Honda Accord LX is often advertised in commercials for a starting price in the mid $20 000 range, but the car shown in the commercial is the top of the line EX-L V6 model. The EX-L V6 model looks significantly different in comparison to the LX model through visible styling cues such as bigger tires and rims, a sunroof, navigation and leather seats. On top of that, the EX-L V6 model has a six cylinder engine (in comparison to the LX's four) and has nearly an additional 100 horsepower. This deception may lead you to assume the base model has all these features when the cost of all these upgrades would balloon the price of the car up to over $40 000.

Freight Costs and PDI

Freight and PDI are hidden costs which are charged when purchasing a new vehicle. This generally relates to the cost of transporting the car. PDI refers to the pre delivery inspection of a car. An inspection is necessary before the car is delivered to the purchasing customer. The cost of freight and PDI usually total around $2 000.

Tax

This cost has more to do with the federal government, but nonetheless is still an extra cost which could greatly affect the price of a new automobile. Provinces and states have different tax rates so depending on your location, percentages of taxes will vary.


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