Don’t Forget to Take These Costs Into Account When Buying a Car.
The cars are expensive, and their hefty price tag goes beyond what you see in the window at your local car dealership. Drivers pay a number of running costs, so if you are looking to buy a car, be sure to budget for them.
This is called the total cost of ownership or TCO – the total cost you pay for a vehicle over time. Manufacturers use total cost of ownership to help you compare vehicles better. Car A may be cheaper than Car B on a batch, but over time, if you count maintenance and other factors , Car A can actually get more expensive.
While the total cost of ownership can tell you how much a new or used car will actually cost you, it can also help you figure out how to budget for those recurring expenses because paying for a car goes beyond the $ 200 monthly car bill. This post will give you a rough idea of how much your car will cost you annually depending on where you live, but these numbers are based on averages and your own (ahem) mileage will vary. If you’re looking for a more accurate way to budget for your vehicle, calculate these costs as well:
- Payment by car. If you do not know how much has already been paid, use a simple calculator to help you calculate the amount.
- Maintenance and Repair: Edmunds has a Total Cost of Ownership calculator that breaks down annual costs by vehicle. Of course, this is just an estimate, but at least it is based on your real car.
- Gasoline : This will depend on where you live, how much mileage your car has, and how much you drive. Use the US Department of Energy’s Fuel Cost Calculator .
- Registration, taxes and fees . Many state DMV websites have a “tax and tag” calculator to help you break down expenses. That’s from CarMax .
- Insurance : You can find the rates yourself fairly easily, but NerdWallet has a simple calculator that will give you a rough estimate based on your driving record and zip code.
Once you know how much a car will cost you each year, basic math is enough to work out how much it will cost you each month (well, you know, divide by 12). Like any major purchase, buying a car is not an easy decision, so make sure you know what to expect.