If you are currently out shopping for a new car, you need to know about these 5 hidden costs before you buy that car and get yourself into some financial trouble. And if you’re new to my channel, hi my name is Matthew Long and on this channel all we talk about is making money, saving money, and how to better invest. So in today’s video I wanted to share with you guys 5 specific hidden costs that a lot of folks don’t computate when they’re out shopping for a new car. And believe me, I get super excited when I get something brand new like a car. We all do, it’s natural. And it’s an exciting time for you and your family. But I want you to slow the brakes a little bit next time you’re out shopping for the car. And we’re going to go over these 5 specific costs that can make or break this entire financial decision for you and your family. Because at the end of the day, we want to enjoy driving the car, we don’t want to absolutely hate it within 3-6 months after buying it. So with this, let’s take a look at these 5 costs and that way we make a good, sound financial decision before buying. So let’s utilize the 2024 Ford Explorer as our example. And let’s say this is the car that you and your family know you want to buy and you’re ready to go buy it right now. So one of the first costs that you need to look at outside of just the sticker price is what we call depreciation. And I already know what you’re thinking, you’re probably like, Matthew, if I can afford it and I like the monthly payment, what does that matter to me? Well the reason you need to be cognizant of depreciation on any vehicle that you buy is you need to know about what the value of your car will be worth if you need to go resell it over the next 5 years. And that’s why we need to look at depreciation a little more closer, whether we’re buying and in particularly more so when we’re leasing. Now the depreciation chart behind me provided through Car Edge, you can see right here if you were to buy the Ford Explorer off the lot and driving it from year 1 all the way here to year 10, the useful line slowly goes down to basically salvage value. So the reason we want to understand how depreciation affects the car is if we ever need to exit or sell the vehicle, we need to know what the residual or the resell value left of that vehicle is on the open market. And in addition to understanding depreciation, if you were to buy a pre-owned Ford Explorer, by understanding depreciation, the residual value of a used Ford Explorer, you would know then what to pay or what is fair market value on the market for that used vehicle and when is the best time to actually buy it through its depreciation scale. Now outside of depreciation, the next hidden cost that everyone knows about because it’s sitting there on the sticker when you buy the car but no one really ever pays close attention to it, is fuel consumption. When you buy a car like this Ford Explorer, you’re looking at a 20 gallon tank and if the spot price of fuel is right around $4 a gallon, you’re looking at nearly $26 to $2800 a year just in fuel cost. If you’re not taking that into consideration with your monthly payment, it’s going to hurt you down the road. Thirdly, you need to keep in consideration the insurance premiums for the car that you’re buying. If you’re buying the Ford Explorer or you’re buying any other models, you need to know exactly what the premium you’re going to pay. Not a guesstimate, you need to know because the last thing you want to do is drive off the lot, you’re enjoying the car and a few months in, the fuel costs are eating you alive as well as the insurance premiums every single month are not fun. And all you’re thinking is I want to get rid of the car. That is not what we want to do because again, this is just three of the hidden costs of owning that car. There’s still two more. That’s right. You’re also going to have maintenance and servicing costs. Now I get it, you’re buying a brand new car. You may not have maintenance in the first 50 to 60,000 miles, but you’re definitely going to have oil changes. You’re definitely going to have to change out filters and you’re going to definitely have to change out potentially your tires and your brakes down the road as well as you come up to 50 and 60,000 miles. You need to know what those costs look like so you can budget those in on your monthly payments. And lastly, before you sign in a car dealership and you take out that credit application to finance your car, whether you did your financing prior to getting the dealership or you’re doing in-house financing with your dealer, I cannot stress this enough, but loan interest rate. We understand what interest rates are. Higher interest means a higher payment. But what it also means in a hidden intrinsic cost to you as a consumer is if you’re paying more in interest, even though you might enjoy the monthly payment and you’re good with What’s also going to creep up behind you is called negative equity because if you’re only paying interest and you’re not really paying the principle of the vehicle down, you’re in a tricky spot if you ever need to sell it or trade it in because you’re going to owe more than what the car is worth. That is a terrible hidden cost that it’s not something I want any of you guys to fall victim to. So in closing, keep in consideration these five hidden costs when you’re out buying your car and don’t simply focus on just the sticker price and what the monthly payment is. There’s a lot of moving parts to owning a car, so I want the experience to be one that is enjoyable and not one that you’re like, man, I just want to get out of this situation. If you follow these steps and you understand these costs, you’ll be perfectly fine. And that is the whole point of this channel. I hope you got value in today’s video. As always, I will see you guys on the next one.