What are the 6 Main Costs of Owning a Vehicle?

Most people spend more on their vehicles than they think. The longer a car is driven, though, the more affordable it becomes. For those who don’t believe this theory, consider the main costs associated with owning an expensive vehicle (and any vehicle) found here.

Fuel Costs

Buying an expensive car is fun, and it’s possible to learn more about it here. However, the costs associated with this purchase may not be as much fun.   On average, gas costs approximately 11.2 cents per mile. Remember, this is just an average based on national statistics. Some gas-hungry, expensive cars may cost much more in fuel than those numbers reflect. Actual fuel costs are impacted by other factors, too. For example, road conditions, cost of gas in the local area, and car efficiency all impact the total cost.

Finance Charges

The average financing cost is $669 annually. This assumes that a person purchased the vehicle with a 10 percent down payment, a five-year loan, and an average credit score. The amount paid is going to vary depending on the size of the down payment. It also depends on the length of the loan and a person’s actual credit score as well as the vehicle’s price.

It’s a good idea to learn about the potential finance charges of a vehicle before buying. This can be done with an auto loan calculator.

Depreciation

New cars experience significant depreciation in the first years of ownership. The depreciation represents the loss in value for a vehicle during its useful life. It’s estimated that a new vehicle depreciates by 20 percent (or more) as soon as it leaves the lot. After that, it falls another 15 percent each year.

Insurance Costs

The average cost for insurance is $1,115. However, for expensive vehicles, this cost is typically much higher. Also, the actual price will vary from one state and city to another. There are ways a person can reduce their insurance costs. It’s also a good idea to compare insurance quotes from several companies to find the one that best suits the driver’s needs.

Tires and Maintenance

According to AAA, annual maintenance is approximately $766.50, and the tires are about $147 per year. This is only true for later model cars.

The cost of tires and maintenance for more expensive, newer vehicles are usually much higher. Keep in mind that these costs can be reduced by performing routine repairs regularly rather than bringing the vehicle to the shop.

Taxes, Registration, and Licensing

On average, these costs amount to approximately $668 each year. However, this is going to vary from one state to another. For example, there are some states where a driver has to pay excise taxes or ad valorem taxes. With this, the driver is taxed on the depreciated value of the vehicle every year.

However, in other states, there are just small registration fees. It’s a good idea to find out what these fees will be before purchasing the vehicle. This will help prevent surprises.

The Total Cost of Long-Term Ownership of an Expensive Vehicle

It’s important to understand that all the figures here are based on the average costs that drivers have to pay for a new vehicle purchase. Make sure to keep all this in mind to understand what it is going to cost a person to buy and own an expensive vehicle. This can help ensure that no one has to pay more than they can afford for the vehicle they want to drive.

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