Although the just-concluded Cash for Clunkers program appears to have been a success, there is concern that the prospect of “free money” may have enticed some consumers to buy vehicles that are beyond their financial means.
The program placed some restrictions on which new cars and trucks qualified for the program, but there were no minimum income requirements placed on buyers. One thing that was required of new car buyers was that they had possession of their trade-in’s title. That means the vehicles were paid for.
Also, many who traded in their vehicles in order to receive a government rebate of up to $4,500 had not faced the prospect of making monthly car payments for months, maybe even years. In addition to monthly financing payments, these new car owners may also be facing higher insurance premiums required by their financing institutions to cover the higher replacement cost of the new vehicle.
In addition, because only certain new vehicles with specific fuel efficiency ratings qualified for the program, some consumers may have ended up buying more car than they had planned on.
If you are one of the millions of Americans who did not participate in the Cash for Clunkers program but are considering buying a new car, there are plenty of affordable options available. Some industry experts also expect dealers to offer a new round of incentives this fall.
A recent Yahoo Finance article states that “a well informed consumer will get a better deal when buying a vehicle.” Arming yourself with information is essential to negotiating a fair price, locking in the best financing and making sure you can really afford your new vehicle over the long term.
Automobile affordability involves much more than the purchase price. As mentioned earlier, you also need to consider the cost of insuring your new car or truck. Other considerations include the cost of fuel, maintenance, repairs not covered by your warranty and depreciation.
Taking all these factors into consideration, Edmunds has compiled a list of the top ten most frugal vehicles to own and operate. In addition to the initial purchase price, the list also provides the total cost of ownership and maintenance as well as a cost per mile estimate, each of which is based on driving 15,000 miles per year.
Topping the list with a base sticker price of just $10,690, and a 5-year total cost of $25,958, is the Hyundai Accent GS. Other vehicles to make the top ten list are (in decreasing order of affordability) the Nissan Versa, (base model), Chevrolet Aveo5 LS, Suzuki SX4 Sedan, Pontiac G3, Mazda3 iSport, Honda Fit, Pontiac Vibe and Toyota Yaris. Rounding out the list as the tenth most affordable vehicle is the Nissan Sentra with a starting price of $16,070 and a 5-year total cost of $29,623.
According to the U.S. Department of Transportation, only two of these vehicles, the Honda Fit and Nissan Versa, made their list of top ten vehicles purchased through the Cash for Clunkers program.