The True Cost of Owning a Car
It's common knowledge that automobiles may be highly costly. There is also the annual average cost of gas, which is rising, regular maintenance costs, and insurance premiums to consider. While we're all aware that these things add up, few of us can determine how much it truly costs to keep a vehicle.
Inflation and disruptions in the supply chain have driven up the price of owning a vehicle, new or old. In 2022, the annual cost of automobile ownership will be $10,728, up from $9,666 in 2021. The average price of a new vehicle is $48,301 as of June 2022, while the cost of a used car is $28,200. Between June 2021 and June 2022, transportation expenses are projected to rise by 9.5% (excluding petrol).
Certain expenses related to automobile ownership are more noticeable than others, but it may be possible to cut down on these outlays. Here are some things to think about whether you're a first-time automobile buyer or simply want a refresher. Come on, let's check it out.
Expected costs of owning a car:
Gas
An integral part of every motorist's operating costs is fuel price. According to AAA, as of early 2022, ordinary unleaded petrol will cost around 18 cents per mile. That's $2,700 a year only for gas if you drive more than 15,000 miles. Most large cars, including pickup trucks and sport utility vehicles, receive far worse gas economy than a compact car. You may save money at the pump if you are careful about how you buy gas.
Maintenance and repairs
According to AAA, a new car's monthly costs for repairs, maintenance, and tires average $121. Oil changes and tire rotations are routine maintenance that incurs expenditures and are performed every 5,000 miles or three times a year. The average duration of manufacturer warranties is three years or 36,000 miles. Certain repairs may be covered by the manufacturer's warranty or an extended warranty, saving you money. If a manufacturer's warranty doesn't cover your automobile, you should save up for monthly repairs, regardless of how often they're required. This way, you won't have to worry about being slammed with a massive price for unscheduled maintenance.
Registration, fees, and taxes
The cost of getting a license, registering, and paying taxes on a car in 2022 is estimated to be $675 for the typical driver. The amount of these fees, how frequently they are paid, and how often they are paid all differ from state to state. Depending on your location and the nature of your required fees, the amount you'll have to shell out each year in this bracket may vary.
Insurance
The average cost of a year's full coverage insurance in the United States is $1,588 per policy, according to AAA. However, premiums are affected by several variables, like the coverage levels you choose and the vehicle you drive. Your premium may be higher or lower than the national average, depending on your individual situation and coverage choices.
Depreciation
Even while depreciation is not a payment that requires you to pay cash, automobiles often lose value over their ownership. This indicates that you will lose money over time, affecting the total cost of ownership.
Minimize Your Costs
Leasing a car might be the best option if you seldom use it. Using public transit is an easy way to reduce your monthly transportation costs. Transportation options such as buses, trains, subways, and vanpools may save you money compared to driving alone to work every day. There will be no upkeep fees incurred.
On average, a modest car will cost about 60.6 cents per mile to operate, while a gas-guzzling SUV would cost around 87.4 cents. You may cut your annual gas costs in half by carpooling with a buddy. Aside from the obvious health benefits, this is also a positive step for the planet since you must breathe the air to live.
As well as saving money and helping the environment, taking a walk or riding a bike instead of driving may get you where you need to go faster. Only spend extra cash on an eight-cylinder engine if a four-cylinder one will suffice, and vice versa; unless you often transport enormous loads, there's no need for more power. If you must drive, try to avoid making many journeys in one day.
Keep track of your transportation costs regardless of how you travel about. Insurance and routine maintenance are examples of supplementary expenditures. The more careful you are with your spending, the more money you will have for other purposes.
