Cost of Vehicle Ownership

Typical Car Ownership Expenses

If you’re considering purchasing a vehicle, it’s crucial to factor in all the ongoing expenses that come with owning a vehicle to assess affordability. After determining the total cost, you can proceed to enjoy the car shopping experience. You’ll also be about deciding if you can afford wood accents, premium audio, or leather seats. Keep reading to determine which expenses you should consider before purchasing a vehicle.

Monthly Car Payment

When considering purchasing a vehicle, many buyers rely on monthly payments to determine whether they can afford it. As of August 2023, Experian reports that the average monthly payment for a new vehicle is $725. Choosing a Chevrolet Malibu or a GMC Terrain can be a cost-effective alternative.

It’s important to factor in the cost of financing, in addition to the purchase price, when budgeting for a vehicle. This can provide opportunities to save money.

A large portion of the total cost of your loan comes from the interest. For instance, if you buy a car for $30,000 with a 6% interest rate over 60 months, the total interest will be $4,7999.04, resulting in an additional $179 monthly. To lower your monthly payment, look for a car loan with the lowest interest rate you qualify for.

Car Insurance

Continuing to pay for a vehicle that you no longer need can be frustrating. Fortunately, there is insurance available that offers gap insurance as an option. In case of an accident, your insurance can cover the remaining cost of your vehicle. The price varies depending on your chosen coverage, driving history, and vehicle value.

Before you decide to purchase a vehicle, obtaining insurance quotes from reputable companies is essential to determine monthly insurance expenses and confirm that you can afford coverage.

Fuel

Fluctuating gas prices due to market, supply, and arbitrary changes make predicting fuel costs difficult. Based on an estimated annual mileage of 15,000 and an average fuel cost of 18 cents per mile, the American Automobile Association reports that the average American spends roughly $2,700 per year or $225 per month on gas.

If you’re looking to save money on gas, some apps can help you find the lowest-priced gas in your area. However, keep in mind that driving extra miles to save a few cents per gallon may not be worth it.

Registration and Fees

The taxes and fees that come with buying a vehicle can be challenging to comprehend. The amount of car insurance you pay is determined by factors such as the type of vehicle you own and the location you live in. If you’re located in North Carolina, it is crucial to research the precise fees and registration costs for your vehicle to budget accordingly.

On Average, car owners pay $675 per year in fees and taxes. For an exact estimate, check the amount for your vehicle and location.

Maintenance and Repairs

Are you looking to keep your vehicle looking and performing its best? You may be wondering about the cost. Bankrate reports that the average American spends between $370 and $786 per year on vehicle maintenance. Remember to budget $31 to $66 per month for vehicle maintenance. It’s important to save for these expenses to keep your vehicle in good condition. Our service center provides affordable maintenance and repair options with regular deals.