It's question a lot of folks have right now given the current economy. How much does it cost to own a car? It's an important query, because you don't ever want to find yourself in a situation where you buy a new vehicle, and then discover you really can't afford it because you didn't factor in all the various financial aspects to determine the true cost of ownership.
According to the most recent AAA Your Driving Costs analysis, the total cost of owning and operating a new vehicle is $11,577, or $964.78 per month. This is based on 15,000 miles driven in a year.
There are a lot of factors that go into determining true ownership costs, and it's important to note that they can vary widely based on a driver's driving history, where they live, their credit score, and other factors. So the roughly $1000 a month is a number to keep in mind - with the understanding that each car buyer's situation is different.
One thing is true for everyone. Depreciation is the most significant cost of vehicle ownership. Your vehicle loses a chunk of its value as soon as you drive off the lot, like it or not.
Monthly payments like insurance and finance costs are both typically some of the biggest monthly expenses for car ownership and should be factored in to any car buying decision.
Then you have fuel costs, which vary based on what type of vehicle you drive and the gas or electricity prices in your area.
Maintenance, repair and tire costs are another thing to budget for - all are critical to your safety and upkeep of your vehicle to keep it in good shape.
Of course you'll pay tax, title and license costs when you buy the vehicle, but you'll have annual car registration fees to think about and in many cases required inspections depending on where you live.
AAA offers a great Your Driving Costs calculator to help figure out the costs of owning a vehicle specific to your situation. Of course I always recommend talking with your financial advisor in these matters as well.
If you budget correctly, keeping all the ownership costs in mind beyond just a car and insurance payment, you won't find yourself in the stressful situation of being unable to keep you car. It's a position you don't want to be in - and I tackle that topic in my advice article here.
