How much does it cost to own a car?

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While the price of a car sticker will guide you to the right make and model for you, it’s not the only price you should keep in mind before buying. Maintenance costs play a large role in the overall cost of the car, along with auto insurance, gasoline expenses, and taxes.

How to estimate the total cost of owning a car

To estimate the total cost of owning a car, you will need to take into account many factors, including maintenance and repairs, auto insurance, gasoline expenses, registration, fees, taxes and depreciation of the car. By doing your research ahead of time, you won’t be blinded by the list of fees and know you can really afford what you’re driving.

Maintenance and repairs

Regular car maintenance can cost less than $ 100 per visit, although this price increases with older cars. Edmunds Car Care Calculator can help you determine the average costs based on the make, model and mileage of your car.

While cars today can travel 5,000 miles or more between regular maintenance visits, it is a bad idea to lengthen the time between maintenance visits to save a few dollars on the costs of maintenance of the car. You should always follow the manufacturer’s car maintenance schedule that is in your owner’s manual to maximize the life of your car and to ensure that the manufacturer cannot void the warranty on your new car.

To avoid paying for maintenance you don’t need, always compare your mechanic’s or dealership’s recommendations to items listed in the car’s maintenance schedule in your owner’s manual. This way, you can safely say no to any service that is not recommended by the manufacturer.

Finally, make sure that your receipt details each service performed on your car, as well as the date and mileage of the car. Keeping these receipts will help you if you ever find yourself in a warranty claim situation with the manufacturer. It can also help your car sell faster, as it shows any future buyer how well you have taken care of your car.

Car insurance

Although the 50 states do not require their drivers to carry auto insurance, for most drivers, this is an important consideration when calculating the true cost of owning a car. Auto insurance can save you tens of thousands of dollars in a collision, and the average driver pays around $ 140 per month.

The best way to determine your auto insurance costs is to compare quotes from a few companies. Your insurance rate varies based on your age, accident history, annual mileage, gender, vehicle and more, so take your time and look for the cheapest auto insurance option. dear to you.

Gas expenses

The cost at the gas pump varies depending on demand, taxes and location. But as a car buyer, you can prepare for the expected cost by looking at your car’s fuel mileage at FuelEconomy.gov. Fuel economy is the distance a tank of gas can travel; the higher the number of kilometers driven per gallon, the better the fuel economy.

Car and Driver research shows that “good” gas mileage for non-hybrid cars hovers around 20 to 30 miles per gallon, while hybrid and electric vehicles can approach 50 to 100 miles per gallon or more.

You should also consider the octane of the fuel and the type of fuel needed. A high performance vehicle will require higher octane premium gasoline, which could impact your monthly budget.

Registration, fees, taxes

When you buy a car, there will always be additional fees that will be added once you are ready to sign the contract. The top three are vehicle registration fees, documentation fees, and sales tax.

Registration fees vary by state; in some states the registration fee is less than $ 100 per year, but other states charge more than $ 200. This cost can also be influenced by the price, age and weight of your vehicle.

Documentation costs cover the documents that accompany the purchase of a new vehicle. Many dealers use these fees as a chance to get extra cash. Some states have a documentation fee limit of $ 100 to $ 200, but many states do not regulate documentation fees. Check your state’s rules ahead of time to be prepared to negotiate if that number is too high.

Sales tax also varies by state. California residents can expect a maximum tax of 10.25% on their cars, while Michigan buyers have taxes capped at 6%. An auto tax rate calculator can help you avoid surprises when signing the contract.

Depreciation

The depreciation of your car is the rate at which it loses value over time. It shows the difference between its current value compared to when you first bought it. This is an important factor because you could lose money if your vehicle has a high depreciation rate.

Edmunds Car Cost of Ownership Calculator can help you determine the depreciation of potential vehicles over a five-year period, as some cars depreciate faster than others. In general, new cars depreciate faster than used cars.

How to minimize your vehicle costs

Besides doing your homework before signing a contract, there are a lot of things you can do on a daily basis to keep your vehicle costs low once the car is yours:

  • Don’t drive too fast: Speeding, quick acceleration, and hard braking all reduce your car’s gas mileage. Driving the speed limit – or slightly below – will help save you money at the gas pump.
  • Choose a reliable mechanic: Take the tour with a few mechanics and watch reviews online before picking one up. Having a relationship with a trusted mechanic will ensure fair costs.
  • Take a defensive driving course: Many insurance companies offer discounts to drivers who successfully complete defensive driving courses online.
  • Do not abuse the air conditioning: Using your vehicle’s air conditioning when it is not needed can have a significant impact on its fuel consumption. When possible, lower the windows instead of raising the air.

Key points to remember

Maintenance costs, insurance, and extra charges can leave you in dire financial straits if you’re not prepared, so plan ahead to make sure you can truly afford the vehicle you’re buying. Along with this, it is always a good idea to check current auto loan rates before entering into negotiations, as a low interest rate will help you save money over time. Create a budget that takes into account all of your ongoing costs so you’re ready to start making payments once you leave the dealership.

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