How much did your car cost you? Odds are, it wasn’t free. The price you paid for your car isn’t the only cost of owning a car that you’ve probably incurred either. Let’s talk about the most overlooked costs of owning a car. While these costs are often overlooked, they probably won’t surprise you.
1. Is it worth financing a car?
First things first, let’s talk about the actual process of buying a new or used car. Essentially, you have three options: pay in cash, lease the car, or take out a loan for it. But is financing a car actually worth it? Between interest rates and finances charges, CarEdge reports that it might not be.
But if you have no choice but to finance a car? CarEdge recommends working on your credit score. The higher your score, the lower your rate will likely be, CarEdge reports. “This shows the financial institution that you are responsible with your money and are very low risk when it comes to paying your loan off,” the publication added.
2. DMV fees are one of the most overlooked costs of owning a car
You’ve signed along the dotted line, shook the car salesperson’s hand, and are now the proud owner of a new or used car. What could you possibly have to pay for next? DMV fees, of course. While such fees are one of the most overlooked costs of owning a car, they really shouldn’t surprise you.
According to the National Conference of State Legislatures, every state requires vehicles to be registered and titled with their local DMV. These DMV fees vary from state to state and can depend on several factors, including a car’s weight, age, or even fuel economy ratings.
3. How much does car insurance cost per month?
Car insurance costs are part of owning a car. But how much does car insurance cost per month? According to NerdWallet, the average cost of car insurance in the US is $1,592 per year. Break that down and that works out to an average monthly car insurance rate of approximately $133 per month. Here’s the thing, though, those figures assume that you’re a good driver that also has a good credit rating.
If you don’t have a clean driving record or have a lower credit score, your car insurance costs per month could be significantly higher. Just take a look at these average car insurance costs per month:
- $2,439/month after one at-fault accident
- $2,812/month for a good driver with poor credit
- $3,114/month after being convicted of a DUI
4. Car maintenance costs can drive up the costs of owning a car
Monthly car insurance rates are one of the most overlook costs of owning a car. So are car maintenance costs, CarEdge reports. As a matter of fact, NerdWallet reports that the average cost of car repairs, maintenance, and tires is approximately $112.50 a month for a new car. The most common car maintenance costs include oil changes, tire rotations, among other things.
The good news is that if you’re buying a new car, it may come with complimentary maintenance. For instance, all new Toyota models come standard with ToyotaCare. This complimentary program covers normal factory scheduled service for 2-years or 25,000 miles, whichever comes first. Even better, it also includes 24-hour roadside assistance for 2-years and unlimited mileage.
5. A car’s depreciation can cost you down the road
You’ve probably heard it before. The minute you drive a new car off the dealership’s lot, it immediately loses a significant amount of its overall value. While the overall sentiment is true, it’s important to note that not all cars depreciate equally. However, regardless of which new car you buy, that depreciation could cost you down the road.
In fact, according to CarEdge, if you plan on selling your car down the road, depreciation will impact how much you can sell your car for. The good news is that determining how much your car will depreciate isn’t all that difficult. Kelley Blue Book, for instance, makes it extremely easy to determine the overall value of your car.
Have you calculated how much owning a car will cost you?
There’s really no denying it. Buying and owning a car will cost you. However, now that you know the most overlooked costs of owning a car, you can work those costs into your budget.