How Much Does a Car Actually Cost??

By Kimberly Graf. Published on September 11, 2024

So you might know your insurance cost every month, or even the cost of your car payment and how that rolls into the actual cost of your car. But those aren't the only car-related costs that you might be expected to pay.

But how do you know what you'll actually need to be able to own a car? We'll help you find a rough estimate!

To start, you're going to need to know the amount a car payment will run you. The average on the market right now is about $300 a month for a used car. New cars can even double that amount. This largely depends on your credit history and the amount of your down payment, so there is no guaranteed figure that we can give you.

However, once you know how much your monthly payment will be, you can proceed with the other things you'll have to pay.

Car insurance is the next big expense. Your rate will vary depending on a number of factors: age, driving history, type of car, neighborhood, and the number of drivers on the policy all change the amount you'll have to pay. The average is about $100 a month for used cars, but that is by no means a hard-and-fast rule.

no doubt that car insurance is mandatory for every car owner. Why? Because emergencies never come informed! An accident can occur anytime and anywhere

Once you have your car payments and insurance taken care of, you'll have to factor in fuel costs. Gas isn't cheap, and hasn't been for a long time. You'll have to figure what type of car you're getting and how you'll be driving it. If you're only going across town to get groceries or go back and forth to work, it might not run you very much. That's especially true if you have a fuel-efficient hybrid or other small car.

For the sake of saving money, you might want to go with the smallest car that you can fit your family into. These often have less fuel costs associated with them.

Then there's maintenance and regular repairs. There are some things that just need to be fixed, no matter how long you own the car or how new it is. Oil needs to be changed every 3,000 miles, tires need to be changed at about 60,000, and there are a dozen other small repairs and upkeep costs between those things. Of course, used cars have a higher risk of incurring more repair costs, but some newer cars can also be more expensive to fix.

Be proactive and prevent possible damages to your engine, make sure your car is properly maintained and that the oil is changed on a regular basis.

You'll need to get your registration done when you first get the car. It's a fairly easy process, but the cost can be a little hefty depending on the car you have. Newer cars cost more to register, and it is based largely on the full cost of the car. So if you buy a more expensive car, expect to pay more for just about everything else – including registration and related fees.

The tags will have to be updated every year – or, some places, less often. Still, it's worth factoring that small amount into the total cost.

And if you own the car outright, expect to pay property taxes in most states every year.

When you factor it all together, the cost of owning a car comes down to far more than just your monthly car payment and insurance. Suppose your car needs a new tire at some point, or your brake system needs to be serviced? That's all going to add up over time.

Cheap Car Insurance – How to Reduce the Cost of Owning a Car

This last note is mostly for brand new cars. The moment that you purchase a car, sign your contract and drive it off the lot, the car loses a chunk of its value. This is important to realize for a number of reasons. For the most part, you've basically been given a loan for the full price of the car and this is what you're paying off, with interest and all.

If you purchase a car for a retail price of $26,000, for example, you'll be paying half that again in interest before you own the car. If you take into account that the car is no longer worth even the retail price when it leaves the lot, the numbers just don't add up. You'll always be paying back far more than the car is worth.

Used cars don't suffer from the same sort of depreciating value. After about five years from the date of manufacture, this stops being such a painful thing to think about, because the depreciation-per-year slows down to a more manageable amount.

While it isn't exactly a straightforward cost, it's still worth thinking about when you purchase a new car over one that is a few years older already. You might actually be saving money. Or, depending on the car, it might even out in repairs.

So next time you decide to purchase a car, keep in mind that the costs exceed what you normally expect in nearly every instance.