It’s a fact that owning a vehicle can be considered a necessity for your transportation needs. In many parts of the world, owning a car is almost considered to be a rite of passage. Some people even view car ownership as a way to display their higher social status. Many view vehicles as collectible items that are at, or near, museum quality artifacts. Regardless of your view on vehicle ownership, there are many who find themselves biting off more than they can financially chew. Mostly because they weren’t prepared for the true cost of vehicle ownership. There is more to vehicle cost than just the purchase price.
Whether you’re looking at purchasing a new car, or an used car, there are numerous costs to take into account other than just the initial purchase price. Even the initial purchase can have hidden taxes and fees that you may not be aware of. There is also the depreciation in value that occurs the moment you drive a new car off of the car lot. If you are looking at a used car, you may not have depreciation, in fact, in some cases an older car can appreciate in value if it is deemed collectable. But, the drawback to a used car is the lack of warranty and any mechanical costs are going to come out of your pocket.
For simplicity let’s look at fuel mileage, and the yearly financial costs for insurance, taxes and the loan cost. These factors are going to be a large part of the total cost of ownership for a vehicle.
When shopping for a vehicle, most cars offer a measurement of fuel economy. If you don’t see it listed on the car, you can usually find an average fuel economy statistic on the internet. Let’s use an example. If you drive an average of 20 miles per work day, and you work 50 weeks per year, your yearly mileage needs would be 5000 miles per year. This isn’t including any other mileage that you would use your vehicle for. If you purchased a car that averaged 20 miles per gallon of fuel, you would consume 250 gallons of fuel per year just driving for work. If fuel costs $4.00 per gallon, that is $1000 of fuel costs per year to drive to work. For more on how to calculate fuel mileage of your car use this online calculator: Fuel Mileage Calculator
In addition to fuel, there is may also been a monthly loan payment if you financed the purchase of the vehicle. If you want to learn more on how to calculate the monthly payment of a vehicle loan, try this online calculator: Vehicle Loan Monthly Payment Calculator
If you are looking at purchasing a vehicle, you may want to look beyond just the monthly required payment. How much money will you spend in the long run just to own the car? By the time you pay off the loan, how much will the vehicle be worth? These are important things to consider. To learn more about the total cost of a vehicle loan, use this online calculator:
Now you have just some of the costs of owning a vehicle. In addition to these there may be maintenance costs, taxes, and insurance to think about. Don’t drive yourself crazy trying to own a car you may not be able to afford.