What Is The Real Cost Of A Car?

July 20, 2009

When you think of the cost of a car you probably zero in on the actual cost of the vehicle, but there is so much more. When you stop to think about it, you probably begin to add in the many costs that come along with the actual price of the vehicle.

You will begin with adding in the taxes that you will have to pay on the car, any fees that come along with the purchase, the interest you pay on any car loan you take out, and the cost of vehicle registration. The costs do not stop there. You still need to factor in the insurance costs, operating costs, and depreciation that will happen to your vehicle over time.

Insurance Costs

Insurance costs are basically the insurance premiums that you pay for your car. You have some leeway in this category because you can decide how much coverage you want. You have to adhere to state insurance guidelines but after that it is up to you.

You can choose what types of coverage to go with and what deductibles you want set. These will influence the actual amount you end up paying. This amount could be in excess of $1000 or more a year depending on multiple factors. Some of these factors are your age, the type of vehicle you have, and your driving record.

Operating Costs

Operating costs may amount to the largest additional expense when it comes to owning a car. Your car will not run if you do not put gas in it so you will need to pay for as much gas as you plan to use. On top of this, you will need to change the oil periodically if you want your car to continue to run well or to run at all. This means that you will need to pay for the oil if not the cost of having someone change your oil for you.

The same goes for new tires, replacement fuses, and replacement bulbs. These car components do not last forever and will need to be replaced when it is their time. These costs will be related to how much you drive your car. If you use it more frequently then these parts will wear out more quickly and need to be replaced sooner.

Depreciation

This is probably the least desirable of your car’s qualities. As soon as you drive your car off the lot then it starts to decrease in value. This may not become evident to you until you go to sell your car at which point this truth will become painfully obvious.

How quickly a car decreases in value depends entirely on the car. Some cars maintain their value quite well over time while others do not. You can always check up on the value of your car at any point in time by checking the blue book value. It may not be an exact representation of the value of your car, but the estimate should be pretty close.

The cost of a car is more than the value of the vehicle. You need to be aware of all the other expenses that will pile up when you buy a car so that you are not caught unawares. The dollar amount that you pay for your car and its maintenance may continue to grow over time.