Owning a Car: Finances 101

Car Finances: It’s more than just the sticker price

Whether you are in the market for a brand new car or a “new-to-you” car, figuring out your finances is one of the most important steps of the process. Your car finances go beyond just deciding if you should use cash or take out financing to pay for your new vehicle. When you are budgeting for a car you need to make sure to include the monthly and yearly expenses that will accrue over the life of your car. These expenses include gas, maintenance, and auto insurance… And don’t forget you need to pay for licensing each year as well!

Car Insurance

One of the most important expenses after the purchase of your vehicle is your car insurance. In Missouri, it is mandatory to have car insurance in order to legally drive. Your car insurance costs will vary depending on how much coverage you carry, but it is safe to budget for liability and collision insurance. In most cases you can choose to be billed monthly, bi-annually, or once a year, and some companies will offer you a discount for paying bi-annually or yearly. There are several other factors that will affect your individual car insurance costs so it is a good idea to shop around to find the best prices before buying a car.


Don’t forget to account for the cost of gas each week! This cost can be easy to budget for, and it is a good idea to include a little extra each week to account for fluctuations in the cost of gas. If you are looking at a hybrid or electric vehicle, your gas prices will be lower or non-existent but you will need to account for the increase in your utility bills to cover the electricity usage to charge your vehicle.


Maintenance can be one of the highest auto expenses over the lifespan of your vehicle. If you’re buying a new car, the initial maintenance costs will typically be lower and hopefully you will only need to pay for oil changes and routine maintenance.

If you choose to buy a used car, be prepared that your initial maintenance costs may be higher and you are at a greater risk of having a large maintenance bill early on, especially if your car has to undergo heavy work. Ideally, the research you do up front and working with a reputable car dealer will save you from having to pay large maintenance bills right away, but it’s important to incorporate maintenance fees into your car budget.

Sticker Price

Even the sticker price of your new car isn’t 100% straightforward. The price of your car as listed may only be the base value of the car. If you want to add on any additional warranties, maintenance packages, or extra features, these will raise the final cost of your new vehicle. Then you need to account for all the other costs that aren’t added into the sticker price of your car. This includes the taxes, fees, and other charges that get tacked onto the end of your sale. The final cost of your vehicle will also vary depending on how you choose to pay for your vehicle.

Financing or Cash?

If you’ve saved up and are able to pay cash up front for your new car, your bottom line will only be the cost of your car, plus the taxes, fees, and any add-ons you select. If you will financing for your car, it is important to remember that you will be paying interest on top of the final sticker price for your vehicle. Working with a local lender, like Missouri Central Credit Union, can ensure you receive an affordable rate for your auto loan and you won’t spend more on interest rates than you can reasonably afford.

For the best auto rates in the Kansas City area, visit MCCU or call 816-246-0002 to speak with a Member Service Representative.