The purchase of cars has become one of the important decisions of many consumers in the context of the gradual emergence of cars as a necessary means of transport for families. The purchase of vehicles is not just a price check, but a combination of additional costs, such as purchase taxes, insurance, billing fees, etc. Understanding the “car purchase formula” is therefore important for rational planning of the budget。
We will then summarize the costs that are common in the process of purchasing cars and provide a simple calculation form to help you better capture the total cost of buying cars。
Main components of the cost of purchasing vehicles
1. Car prices (naked)
This refers to the price of the vehicle itself, i. E. The amount of taxes, fees and insurance not included in the quotations of the 4s store or dealer。
2. Acquisition tax
Under national policy, new cars are subject to a certain percentage of the acquisition tax, usually about 10 per cent of the cost of the vehicle (detailed by local policy)。
3. Strong risk insurance (compulsory motor vehicle accident liability insurance)
The statutory insurance must be purchased at a cost that varies depending on the type of car and the amount of charge, generally between $950 and $1,000。
Commercial insurance (car crash, third party liability, etc.)
The cost of the voluntary purchase by the owner is generally between $1,000 and $3,000, depending on the amount of the insurance, the type of car, the driving record etc。
5. Card fees
These include licence fees, work capital, etc., which generally range from $150 to $300。
6. Interest on loans, if any
If a loan is chosen for the purchase of a car, the interest expenditure incurred during the loan period is also calculated, depending on the amount, interest rate and duration of the loan。
7. Other miscellaneous expenses
Depending on the circumstances。
Ii. Equivalent formula for the purchase of vehicles
Total car purchase cost = car price + acquisition tax + strong risk insurance + commercial insurance + billing fees + interest on loans + other miscellaneous charges
Examples of costing (tables)
Item
Amount ($)
Remarks
Cost of vehicles
100,000
Price of naked car
Acquisition tax
10,000
10%
We're on our own
950
Minimum standards
Commercial insurance
2,000
Includes vehicle loss plus three risk
Card fees
200
Local rates
Interest on loans
3,000
Assuming a three-year loan, 5% annual interest rate
Other miscellaneous expenses
1000
For example, decorations, service charges, etc
Total
117,150
Iv. Notes
- there may be some variations in the cost of different types of vehicles, and local distributors are advised to be consulted before purchasing them。
- the acquisition tax policy may be adjusted over time and the latest tax rates should be recognized before the purchase of vehicles。
- the cost of insurance varies from person to person, and an appropriate insurance scheme may be selected according to their needs。
- loans for the purchase of vehicles need to be combined with their own ability to repay and avoid excessive indebtedness。
As we can see from the above, the purchase of vehicles is not just about the price of the car, and reasonable budgetary planning and costing is an inescapable part of the process. It is hoped that this paper will help you to better understand the “car purchase formula” and make more rational decisions about car purchases。
