Cars

Owning a Car Is More Expensive Than You Think

Owning a new car can be a rewarding experience. We all feel a sense of pride when we sign the papers and get the keys to your brand-new vehicle. Owning a new car can also give you a sense of security. This makes it worth all of the headaches and research you put into finding the perfect car.

A lot of expenses come with being a new car owner. You not only have to worry about the price tag, but you also need to consider how much it costs to maintain a vehicle over time. So, exactly how much should you expect to spend on a new car?

Costs a new car owner can expect

When you buy a car, paying for the actual vehicle is only a small part. First, you need to insure it. There are many factors an insurance company will consider when determining your insurance payment. Things like your age, driving record, and even credit score can affect the amount you’ll be charged.

Your insurance agent will also look at specific details about your car when determining your rates. According to Money Crashers, your insurance company will look at the car’s condition, size, and safety rating. Newer vehicles with higher safety ratings usually have lower insurance rates. 

In addition to buying insurance for your car, you’ll want to consider the cost of regular maintenance. No matter how exceptional the car, all vehicles must be serviced regularly to remain in good working order. Things like oil changes, new headlights, new brakes, and new tires are just some of the things no car owner can avoid.

Owning a car can be expensive

For decades, AAA has conducted annual studies to determine the cost of owning a car. For the last few years, the price of owning a car has increasingly grown. This year, the numbers were higher than they’ve ever been. 

The popular insurance group looked at several 2019 vehicles and factored in the price of maintenance, buying replacement parts, and estimated finance charges. What they discovered was that, on average, a person spends over $700 a month on their car. This means you could end up spending well over $9,000 dollars in a year.

According to AAA, when you factor in insurance, taxes, and license and registration fees, you could pay almost $20 a day to drive a full-sized sedan or pickup truck. The annual price is up by about $200 from last year.

How to lower your annual car expenses 

While the amount of money you could spend every year on your car is shocking, AAA has a few suggestions to help lower your annual costs. First, buying a slightly used car will save you quite a lot of money. Many vehicles will depreciate in value considerably in just a few years. When you buy a 2- or 3-year-old car, you’re able to save a lot of money, while still owning a relatively new car.

Also, you can usually save a lot of money if you buy a vehicle toward the end of the year when dealerships are trying to make room for new inventory. You can also save on charges by getting a shorter loan term.