Have you ever wondered how much it costs to run a car? One of the biggest mistakes people make when buying a car is thinking only about the vehicle’s upfront purchase price and forgetting that there are actually more expenses to consider in the long run.
Below are some of the other costs associated with vehicle ownership that you should be aware of.
Registration fees vary from state to state, but it’s a large ongoing cost you need to budget for every year. Take note that you will have to pay for your car’s registration when you initially purchase a vehicle as well as renew it before it expires. The fee may also depend on your vehicle’s model and age.
Car insurance is one of the things you wish you will never use, but are glad to know you have. It’s also a requirement when registering your vehicle. As a car owner, you need to make sure you get insurance that provides good coverage should you get into an accident. Car insurance rates and premium payments are based on various factors such as the kind of vehicle you own, your age, your location, as well as your driving history.
While this is an optional expense, membership to a roadside assistance organization is one thing you’ll need to consider. Becoming a member gives you peace of mind knowing that whether you suffer from a dead battery, flat tire, or any other roadside issue in the middle of nowhere, someone’s going to come and help you. Most roadside assistance organizations also provide their members with access to discounts such as vehicle inspections.
Unless you’re going to take home your new car and just lock it up in your garage, fuel costs are something you need to be prepared for. Fuel consumption takes a big chunk of your car’s weekly running costs and may depend on the market price, your driving style, the load your car carries, and the size of your engine. Generally, the bigger the engine, the older your car, and the heavier items your car drags around, the more fuel it will consume.
Servicing and maintenance
Regular servicing and maintenance is an essential part of vehicle ownership. Proper car upkeep, however, involves more than just keeping gas in the tank. It covers a whole range of tasks, such as checking fluids and replacing parts like wires, timing belts, and spark plugs, getting an oil change, replacing your battery and filters, and checking your brake system and tires. Tires, in particular, can be expensive given that it bears the brunt of all your accelerating, braking and cornering. But getting fresh tires doesn’t have to break the bank since you can always search and compare prices of car tires online to get the best deals.
- Parking and speeding fines
- Toll fees
- Parking costs
- Loan repayments (if applicable)
Purchasing a car is a big financial commitment. Knowing the fees and charges you will encounter, as well as the various ways to minimize them, can help you work out a realistic budget and narrow down your vehicle choices.
AUTHOR Derek Sall
Derek has a Bachelor's degree in Finance and a Master's in Business. As a finance manager in the corporate world, he regularly identified and solved problems at the C-suite level. Today, Derek isn't interested in helping big companies. Instead, he's helping individuals win financially--one email, one article, one person at a time.