There are many different facets to buying a car, and many are easy to overlook. Most people see things like taxes, repairs and insurance costs as afterthoughts to the car purchase. In reality, they play a huge part in the overall cost of your vehicle. At AutoLiquidator.com, we try to draw more attention to these factors to simply help you get better deals on cars.
First off, what state you buy your next car in will play a big part. Not all states are equal for car buying, and some states are much cheaper to own a car in than others. Depending on what state you live in, you could be paying much more or much less on taxes, fees, insurance, auto financing, repairs, resale value and even gas.
One of the biggest factors at play is the insurance rate, which can vary greatly from state to state. In general, states with a smaller population density have less congested traffic, which in turn means fewer accidents. Fewer accidents means less claims, which keeps the rates low.
This is clearly evident when you compare rates for the exact same cars in big cities to rural areas, like Los Angeles compared to rural Iowa. Another contributing factor is that larger cities generally have higher crime rates, and crime rates can hike up your insurance rate.
Another big factor with insurance rates is what percentage of the state’s population is insured. Drivers without insurance are not able to pay their end of the damages when they get into an accident, which raises rates for the people who actually are insured. Nearly 25% of drivers in Florida and Oklahoma are uninsured, whereas states like Maine and Massachusetts have as little as 4%.
Some states with exceptionally low average insurance rates are:
- North Carolina
- South Carolina
- New Hampshire
States like Nevada, Connecticut, West Virginia, Maryland and Idaho have all seen their rates drop in recent years. Some of the worst states in terms of insurance rates are:
Insurance rates aren’t the only thing that varies from state to state. You still need to consider things like your car’s depreciation, shipping fees, registration fees and taxes. Different vehicles lose value at different rates, and some are much easier to resell in some states than in others. Some states have higher sales taxes than others, and some have none at all.
Obviously shipping a car all the way to Alaska or Hawaii is going to cost you more than one of the contiguous states. Another thing to consider is the quality of the roads and weather conditions throughout the year. The extreme weather shifts, salty roads and generally poor road conditions in Michigan will take a greater toll on your vehicle than if you drove in a moderate climate like in southern California.
When you are working out your budget and trying to see how you will be able to fit a car into it, it will benefit you a great deal to take these things into consideration. You may not have a choice what state you buy the car from, but being a more informed car buyer is the best way to get better deals on your car purchases.