Car Worth Vs. Price

March 24, 2017 · Posted in General Articles on Car Insurance 

Almost all of the car dealerships in Houston highlight the cost of a car as the selling point of a particular vehicle. The gimmick is simple, they place the Manufacture Suggested Retail Price (MSRP) on the window of the car to make it seem more expensive than it is. The MSRP is a suggestion but also a deception, be careful when a dealer claims he’s saving you money by showing you this price.

Many car dealerships in Houston will then use the “cushion” they have on the cost to make you think you are special when they drop it by a few thousand dollars.

The right way to shop for a car is to breakdown the value of what it’s worth over it’s lifespan. This is done easily by calculating the price you pay for the car now, then adding all of the maintenance costs you’ll pay over the next few years. For example, let’s say you buy a 2002 Honda Civic ES with 80,000 miles for $6,500.

You have to tally in the cost of repairs. We can estimate this based on the health of the car. Categories that measure a cars condition are: engine components (such as the motor, radiator, alternator, air filter, battery, etc); tires, exterior components like windshield wipers, headlights, taillights, suspension, brakes.

It’s very likely you would spend about $3000 in repairs over a 4 year period with out any unreasonable factors increasing the chance of breakdown if the vehicle is in “okay” condition, then. That means the value of the car is only $3,500 over a four year period. To clarify, if you bought a vehicle for $9,000 and it had little to no repairs in a Four year period, then you are getting a better deal on your car.

Car shopping on price alone is the single biggest problem with unhappy car customers. When you shop with value in mind, you will have a better idea of what you will really be spending and it will help you determine whether you are getting your money’s worth!

 

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