Understanding Insurance Policies

Posted on: 25 July 2017

If you have been saving up a down payment or the cash to buy a car outright, you might be happy about achieving your financial goal. Before you head to the dealership to buy your car, however, you'll want to make sure that you have everything that you need. These are some of the extra costs that you might need to be prepared for.

1. Title and Registration Fees

When you buy a car, you'll have to have the title and registration put into your name. If you are buying the car with the help of a lender, your lender's name will also be added to the title. Additionally, you will need to have the car registered in your name. Your state may charge a fee for the title transfer and the registration, but if you call your local Department of Motor Vehicles, you can find out how much to expect so that you'll have enough cash.

2. Taxes

Taxes are handled differently from state to state. However, in many cases, you will have to pay sales tax on your vehicle when you purchase it. This will generally be based on how much the car is worth, so if you're buying a more expensive car, you can generally expect to pay more in taxes.

3. Insurance

Before you put the car in "drive" and drive it off of the lot, you're going to need to make sure that it's properly insured. If you already have a car insurance policy, your insurance company might add the car without requiring you to make a payment right away; however, you may have to make a payment on the same day, depending on how your insurer handles things. If you are signing up for coverage without already having an existing policy, such as if you are buying a car for the first time, you should be prepared for the costs of setting up your policy. Comparing rates can help you make sure that you are buying a policy that is a good deal for your vehicle and driving record.

When buying a car, you might just be thinking about things like the purchase price, the down payment and the monthly payments. However, there are other costs that you need to be prepared for when buying a vehicle. Then, you can help ensure that you have everything that you need to drive the car off of the lot, and you can help avoid putting yourself in a financial bind.