When buying a luxury car, there may be a lot of haggling in the beginning. The time you take to shave a few dollars off the initial price is only part of the money saving process. We Buy Exotics is a good place to get started when handling that part of the deal. Afterwards, you have to factor in the cost of upkeep for a high-end luxury car. Look into these four tips so that the hidden costs never take you off-guard.

4. Accidents

Usually accidents wouldn’t qualify as a hidden cost. When it comes to cars, the high usage rate means you should always consider it a factor. Accidents are sudden, and fault isn’t always with the person behind the wheel. Slippery roads, bad signs and even bad luck can all lead to your car getting in a wreck. There are different levels of damage, with the most frightening being a complete total of your car. When a wreck of any kind happens, you are in a bind for multiple reasons.

Just like the initial price of the luxury car, its replacement parts will cost you a premium. Although a used parts market exists for any make and model, you will more than likely want to stay with new parts. Replacing a broken part with a used part gives you less warranty coverage, and adds on to the risk factor of other things going wrong. Labor costs are higher for luxury cars, and the prices are not going down anytime soon. Some mechanics will even refuse to work on specific models due to limited resources. The more your repair options are limited, the higher chance that you’ll be forced to pay a premium to get it fixed.

Your insurance will be different than it is for a normal car. Having to call in and report an accident will never be in your favour, even if you’re not at fault. A good insurance company will honour the contract regardless of the car price. But since the cost of repair for luxury cars is so high, you will have to jump through a few hoops. It will never be as simple as calling in the accident and getting a rental car. If you have to pay a small price for the rental until the repair is done, then prepare to eat that cost for a longer than average time. Until your insurance comes up with a number to handle the repair costs for your luxury car, your hands will be tied. It’s unfortunate, but sometimes the price of the temporary rental can exceed the price of fixing your car.

3. Upgrades

Upgrades are one of the first things that will ding your wallet when getting a car of any type. It’s apparent since salesmen use it as part of the original pitch. In a way, getting an upgrade with the initial purchase is cheaper than getting it done at a later date. Any car buyer should get all of the upgrades that they want in the beginning to keep from paying a premium later on. The problem is that there are an incredible number of upgrades to go through. Some of the most common ones purchased are leather upholstery, a navigation system and safety technology.

The no brainer purchase in those three is the safety technology, which not only protects you, but also protects the car. Prioritise the safety upgrades first before getting to the comfort features. You may also get a discount on insurance by having specific safety features provided by your car. Build in alerts for traffic and a beefed-up braking system should be the bare minimum when getting these upgrades. When you get passed the need for safety features, the price of the car may already be higher than you want. Take a deep breath, because comfort features are also an important part of the buying process.

Heated seats, a better stereo and an upgraded interior are all part of the luxury car buying experience. Getting a luxury car without comfort upgrades makes no sense, and will only cost you a fortune later on when you decide to add them in. Cosmetic upgrades are the only thing that can be done at a later date without an inflated cost. In many cases, it will be a better idea to hold off on cosmetic upgrades so that you can look into all the available options. Unless you have a clear idea of what you want the car to look like, this is one of the easiest ways to save money upfront.

Buying a cosmetic upgrade with the initial purchase of a car will flush money down the toilet if you upgrade it later on. Nothing says wasted money like upgrading your upgrades when a car is still new.

2.The Initial Premium

There are three main things to look out for when getting a luxury car. Taxes, registration and extended warranties. These three things should be considered part of the initial cost of the car rather than separate.

States sales tax adds up and can even reach close to twelve percent. This is a significant chunk of change if you were already threading the needle with costs. There is no way to get around the high tax when it is tied to a specific state. Trying to get cute with shortcuts and workarounds like gifting will only make it a nightmare on your taxes later on. Depending where you are in the world, this number will go up and down. And if you plan on importing a car from another country, then prepare to pay in multiple places.

The registration or vehicle license fee is pretty standard, if you own a regular car. For luxury cars, there is a very strange way the fees are structured that may make you rethink a particular purchase. Some places structure the registration or license fees based off of the value of the car. Once again, threading the needle with the other costs and getting to yet another paywall is frustrating, but part of the process. Owning a luxury car isn’t cheap, so be prepared to go all in with the fees. The good news is that the registration and license are fairly tame one-time costs compared to the rest of the deal.

An extended warranty should always be purchased. There should be no thinking or second guessing when dealing with warranties. Without a warranty, you’re dead in the water if something goes wrong. Some people assume that insurance is all they need after buying a car. Just like insurance, a warranty should permanently be on your to-do list. The extended version just allows you extra breathing room in the later years of ownership.

1. Extras

The gas guzzler tax will come as a surprise to a lot of luxury car owners. The EPA has fuel efficiency standards that must be met to avoid the tax. On the surface it doesn’t seem like they are targeting luxury cars. But when you look at the standards required, it is pretty clear that a luxury car will be the most affected by the rules.

Trucks and sports utility vehicles are not affected. Sports cars, large-engine luxury vehicles and performance cars are the most common targets. If your luxury car is an old muscle car, then congratulations! You’ve just made the EPA gas guzzler tax list. If you also meet the luxury car tax threshold, these costs will add up before you even notice. Just like some of the other fees, there is no way around this. Unlike the other costs, you may find it beneficial to purchase a luxury car in one country over the other. The gas guzzler tax is low, and in some cases not even a factor if the car is purchased there. Buyers that plan on using the car in tax friendly countries can save a lot of money.

Users that plan on using their luxury car as a daily driver will take an immediate hit to the value of the car. Not just with mileage, but through claimed deprecation with taxes. One of the biggest secrets with luxury cars is that you can pay less tax on a luxury car by making this claim of depreciation. Thousands can be saved with this claim, so it is a pretty big deal for most people. But if you work a job that requires heavy mileage, then the claim is invalid. This also applies to independent contractors since your vehicle is technically part of your job.

Wrap Up

A luxury car is more than worth it if you stay in front of the hidden costs. Don’t get roped into the allure of a low initial price without knowing how much it will cost you in the future. The enjoyment of your car purchase relies on taking care of it for the duration of ownership. If you know what is required, then it is a deal that will always keep on giving.