With the ‘credit crunch’ on our minds, consumers are less willing to spend, piling pressure onto retailers.

On the high street many of the big names are discounting in the hope of luring us into the store and convincing us to purchase.

In many respects buying a car, whether new or used is very similar, we are targeted with special offers, discounts and in some cases the chance to make a lifestyle statement.

So it seems that if you have the means, now should be a good time to buy with some attractive vehicle pricing on offer. However, while getting a good deal is obviously important, it’s equally important not to lose sight of the full range of costs that you are committing to.

According to the RAC, it now costs on average 19% more to keep a car on the road than it did this time last year. This makes it essential for both individuals and businesses to understand what these costs will be during the lifetime of a vehicle, crucial information if you are to get a genuinely good deal.

The increase can be largely attributed to two main areas. The biggest contributor is depreciation, a cost that can come back to bite you if you sell the vehicle on. With some vehicles holding their value more than others, this is an example of where making a wise choice up front could pay dividends in the long run.

The second significant contributor is fuel, which now makes up over 25% of the cost of owning a vehicle. It is common knowledge that fuel prices have risen dramatically in the past year with no signs that the market will be less volatile in the coming 12 months. For this reason the choice between petrol and diesel engines and the fuel efficiency of a vehicle could have a big impact on your wallet.

Other areas to consider include service, maintenance and tyre costs, insurance premiums and VED (remember the rates change next year), all of which can bump up the cost of your vehicle. From an environmental perspective, CO2 emissions will also be a consideration with better performing vehicles offering strong potential to save you money.

According to the RAC’s Index, the annual running costs for the average family car have increased by £277 in the last year, and further volatility looks likely in the foreseeable future. This makes it essential that purchasers are not solely focused on the up front price of a vehicle and do some research to understand the whole life costs of ownership. After all, these costs could make a bargain suddenly look like more of a turkey.