In most countries, owning a vehicle is a necessity and not just a luxury. This is especially so in the United States, where the public transportation network is not very well-developed.
But what is the true cost of car ownership? In this article, we will discuss the costs of owning a car in the United States, both in terms of monetary and non-monetary costs.
The True Cost Of Owning a Car
When we’re kids, we look at all the cars on the road and can’t wait until we can drive. Imagine – no more buses, no more bikes, and the ability to go where we want when we want.
A car will allow us to be in control of our travel environment. We know that it will cost something to buy the car. But money is a small price to pay for our freedom, right? As kids, we never consider the true cost of owning.
It is only when we grow up that we come to appreciate how much things cost. As kids, we may have a vague understanding that we will need to fill the tank once in a while.
However, we don’t come to see what driving really costs before we use the car for daily tasks, such as shopping, commuting to work, and running other errands.
Repair Costs on a Car
It would be one thing if owning a car simply meant buying the vehicle and then filling it up with gas once in a while. However, many people neglect to figure out the hidden costs of repairs. Snow tires and tune-ups are other accessories that cars need.
Don’t forget that some cars may look good and drive well but then go on to develop specific problems that cannot be repaired once and for all. It may be that the best you can do is keep the problems in check, and doing so can cost money.
Parking Can Add Up
The price of parking is another associated cost that can drain your wallet. It may not occur to those who don’t drive how much trouble it is to find a safe place to park.
It can also be very expensive. Some parking costs are so astronomical that they prevent drivers from running all but the most essential errands. This is another expense that is part of the hidden costs of motoring.
Tolls and Traffic Fines
If you drive in an urban area, chances are good that you will need to pay a toll to use certain roads. In some places, this is simply a matter of paying a couple of dollars each time you use the road.
In other places, there may be an annual fee or monthly pass that you need to buy. Tolls can quickly add up and become a significant expense.
Traffic fines are another cost of driving. If you get caught speeding, running a red light, or committing some other traffic violation, you will be required to pay a fine. The amount of the fine will depend on the offense, but it can be significant.
The Cost of Insurance
Another significant cost of car ownership is insurance. In most places, it is illegal to drive without insurance.
The amount you pay for insurance will depend on a number of factors, including the type of car you own, your driving record, where you live, and the amount of coverage you want.
Insurance can be a significant expense, and it is one that is often overlooked by those who are considering buying a car.
Depreciation
When you buy a new car, it begins to lose value the moment you drive it off the lot. This is called depreciation, and it is a real cost of car ownership.
The amount of depreciation will depend on the make and model of the car, as well as how well it is cared for.
A car that is not properly maintained will depreciate more quickly than one that is well-maintained.
The True Cost of Vehicle Ownership
Now that we’ve looked at some of the hidden costs of car ownership let’s total up the expenses to get a true picture of what it costs to own a car.
Assuming you buy a mid-priced sedan and drive it for five years, you can expect to pay the following:
- Purchase price: $20,000
- Insurance: $1,500
- Gas: $2,000
- Repairs and maintenance: $1,500
- Tolls and traffic fines: $300
- The total cost of ownership: $26,800
As you can see, the true cost of car ownership is much higher than the purchase price of the vehicle. When you are considering buying a car, be sure to factor in all of the associated costs so that you can make a realistic decision about whether or not you can afford it.
What Should You Do Before Buying a Car?
There is due diligence that goes into buying any big ticket item. Let’s take a look at some things you should do before driving your dream car off the dealer’s lot.
Budget and Financing
Buying a vehicle is the second biggest purchase most people will make in their lifetimes, so it is important to budget carefully and consider all of the associated costs.
If you need to finance the purchase, be sure to shop around for the best interest rates. Getting a pre-approved loan from your bank or credit union is a good way to get a sense of what you can afford.
Keep in mind that the salesperson at the dealership is going to try to get you to spend as much money as possible, so it is important to stick to your budget.
Do Your Research
Before you start shopping for a car, it is important to do your research. You should have a good idea of what type of vehicle you want and what your budget is.
You should also research the different makes and models of cars to find out which one is right for you. Be sure to read reviews from unbiased sources to get an idea of what others think of the car.
It is also a good idea to check the safety ratings of the car you are interested in. You can find this information on the website of the National Highway Traffic Safety Administration.
Test Drive
Once you have found a car that you like, be sure to take it for a test drive. This will give you a good idea of how the car handles and whether or not it is comfortable for you.
Be sure to test all of the features of the car, including the audio system, the navigation system, and the climate control.
You should also take the car on different types of roads to see how it performs in different conditions.
Get a Vehicle History Report
If you are buying a used car, it is important to get a vehicle history report. CarFax and CarHistory are two companies that provide this service.
A vehicle history report will tell you if the car has been in any accidents, as well as whether it has had any major mechanical problems.
This information can be important in helping you decide whether or not to buy a particular car.
Have a Pre-Purchase Inspection
If you are buying a used car, it is a good idea to have a pre-purchase inspection done by a qualified mechanic.
This will give you peace of mind knowing that the car you are buying is in good condition.
It is also a good way to find out if there are any major problems with the car that you are not aware of.
Be Prepared to Negotiate
When you are ready to buy a car, be prepared to negotiate with the salesperson.
Remember, the salesperson’s goal is to get you to spend as much money as possible, so it is important to stick to your budget.
Don’t be afraid to walk away from the deal if you are not getting the car for a price that you are happy with.
What Are Annual Car Maintenance Tips?
Once you have bought your car, it is important to maintain it properly so that it will last for years to come. If you don’t, your cost of car ownership will go up more than you expect.
Here are a few annual car maintenance tips:
- Get an oil change and tune-up. This will help keep your engine running smoothly and prevent major problems down the road.
- Inspect your tires and brakes. Be sure to check your tires for wear and tear, and have your brakes checked by a professional if they are making noise or not working as well as they should.
- Flush your radiator and change your antifreeze. This will help keep your engine from overheating, and it will also help to prevent rust and corrosion.
- Clean and wax your car. This will help to protect the paint and keep your car looking its best.
- Check your battery and replace it if necessary. A dead battery is one of the most common causes of car problems, so it is important to keep it in good working condition.
By following these annual car maintenance tips, you can help to keep your car in good condition and avoid major problems down the road.
Final Thoughts on Buying a Car
Buying a car is a big decision, but it doesn’t have to be a stressful one.
By doing your research and being prepared, you can make sure that you find the right car for you at a price that you are happy with.
And once you have your new car, be sure to take care of it by following some simple annual maintenance tips. By doing so, you will lower your cost of car ownership per year.
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