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The True Expenses of Car Ownership

Susan Kelly

Oct 25, 2023

Understanding vehicle expenditures is essential to managing your finances and ensuring your auto budget matches the actual cost of owning a car. The sticker price and monthly installments are only part of the financial obligation.

Insurance, gasoline, maintenance, repairs, registration fees, and depreciation are all part of automobile ownership costs. These can drastically affect your budget, so examine the cost before buying a car.

You can calculate the cost of owning a car by adding the purchase price, taxes, and other costs. Consider depreciation, the vehicle's value loss. Location, driving record, and automobile model affect insurance costs.

Total Automobile Ownership Cost Calculation

Enter your expenses into the cost of owning a car calculator to discover how much your automobile costs each month. Annual driving estimates of 15,000 miles are pre-populated in the calculation. Here's how to estimate other automobile ownership costs outside monthly payments and insurance charges.

Enter your average gasoline cost into the calculator. Otherwise, divide your monthly miles by your car's rating. Multiply it by your local gas price. Use AAA's pre-populated monthly average. If your automobile has needed many repairs recently and costs more than $1,500 a year, calculate and input the precise amount you spent in the past year. Registering, fees, taxes, etc. This is simple. Enter your yearly car registration renewal amount divided by 12. Include additional regular expenses like parking.

Gas and Fuel Costs in Car Ownership

Gas and gasoline costs significantly affect your monthly budget and financial commitment as a car owner.

Gas Prices

The fuel efficiency rating of your automobile determines your gas expenditures. One gallon of fuel may take your automobile a certain distance, measured in miles per gallon (MPG). Higher MPG means a more fuel-efficient automobile.

Monthly Gas Cost Calculation

Divide your monthly miles by your vehicle's fuel efficiency rating to find your average monthly gas cost. This shows your monthly fuel usage in gallons. Multiply this by your local gasoline price per gallon. Given gas price fluctuation, this is an estimate, but it helps manage monthly gasoline costs.

Fuel Costs

Fuel expenses depend on whether your automobile utilizes unleaded gas or electricity. Traditional fuel automobiles average 15.93 cents per mile. On a 15,000-mile year, this costs $2,390. However, electric vehicles cost pennies per kilowatt-hour to charge.

Fuel Efficiency by Vehicle Type

Fuel economy varies by vehicle type. Compared to trucks and SUVs, sedans have more outstanding gas mileage. Thinking about your vehicle's fuel economy and fuel-efficient alternatives can save you money over time.

Fuel-Saving Strategies

  • To maximize fuel economy, maintain your automobile regularly.
  • Avoid fast acceleration and idling.
  • Carpool or take public transit to save gasoline.
  • Save on fuel with gas station loyalty programs.

Understanding and managing gas and fuel cost of owning a car allows you to budget and make automobile ownership decisions that meet your financial goals.

Car Repair and Maintenance Costs

Vehicle maintenance and repairs are necessary for durability and performance. Driving habits and maintenance affect these expenses.

Frequency and Need

Driving habits affect automobile upkeep. Service your automobile more often as you use it. It would be best to have regular tire, oil, and brake adjustments to keep your car running correctly.

Cost Factors

Repair and maintenance costs include parts and labor. Auto body businesses charge for services and replacement components. The average repair and maintenance costs for new cars are $119.38. Maintenance is usually done three times a year.

Common Maintenance Costs

Oil changes and tire rotations, suggested every 5,000 miles, are standard maintenance charges. AAA estimates a new car's monthly repair, maintenance, and tire costs are $123.


Your car's manufacturer or extended warranty may cover certain repair costs. Manufacturer warranties usually run three years or 36,000 miles. Use these warranties to cut repair costs during the coverage time.

Repair Budgeting

If your automobile is out of warranty, set aside a percentage of your budget for monthly or intermittent repairs. This safeguard reduces unexpected financial costs when irregular maintenance or repairs are needed.

Understanding and accounting the actual cost of owning a car and for repair and maintenance costs helps you budget and maintain your automobile. Regular maintenance extends the life of your car and prevents unexpected costs.

Car Registration and Taxes

Car registration is required for driving. The registration cost and tax depend on your area and state rules.

Fee Structure Variations

Varying states have varying registration costs. Some areas charge a fixed registration cost annually or biannually. The charge depends on your vehicle's age and fuel economy in other regions.

Annual Spending

AAA estimates that the average car owner will pay $762 2023 for license, registration, and taxes to drive lawfully.

Fee Influencers

Your state determines these levies and their frequency. Your registration charges depend on your vehicle's age, kind, fuel economy, and local requirements.

Regional Variations

State registration costs vary greatly. Budgeting this expense requires knowing your location's price structure and payment frequency.

Financial Planning

Knowing local registration prices aids financial planning. Including these costs in your annual budget prepares you for automobile ownership.

Understanding the cost of owning a car and registration fees and taxes helps you budget and handle automobile ownership. Following these rules helps road systems run smoothly and keeps you legal.

Parking Costs in Car Ownership

Consider parking when calculating your monthly automobile expenditures, depending on your location, daily activity, and workplace. Like petrol rates, parking fees vary widely by state and city.

Local Variations

Local demand, availability, and urban development affect parking rates. Cities with high population density or few parking spots have higher parking fees.

Urban vs. Suburban

Due to congestion and limited parking, urban regions charge more. With additional parking, suburban locations frequently have reduced parking prices.

Budget Impact

Budgeting requires knowing your local parking prices. Considering these charges helps you budget for car-related expenses.

Monthly Parking Fees

Parkopedia said New York City has $616 monthly parking fees and St. Louis $85 in 2018. These numbers show that location-based parking fees vary greatly.

Workplace Considerations

City workers and individuals in busy business locations may pay high monthly parking rates. Employees can save money by receiving parking advantages or subsidies.

Parking charges must be considered while budgeting for automotive expenses. Understanding and preparing for parking charges helps arrange automobile ownership finances for regular commuting or occasional trips.

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