Cost of Owning and Operating a Car
Ah, the dream of owning a car was a beautiful dream indeed. The thought of owning a car and having the freedom to go anywhere you want, wherever you want, is one many teenagers clung to for years. The reality? Yes, there’s an element of freedom – the open road is yours for the taking. The reality is, cars can be expensive.
Owning and operating a car doesn’t come cheap nowadays. In fact, one study found it costs $5,264.58 a year to own and operate a motor. Let’s explore what that might include.
Buying A Car
Depending on the type of car you get, buying a car is perhaps the most costly part. According to Insider, the average cost of a used car in America is over $25,000, although you can find options for much cheaper. Bear in mind, lower-priced used cars are more likely to have more miles, an increased need for repairs, and typically cost more to keep on the road.
In the US, 36.8% of used cars were purchased using an auto loan by the end of 2020. Assuming the downpayment is 10% of the vehicle cost like most down payments are, the average charge per year is $699. As you can see, there’s a lot of money to be spent before you can even proclaim yourself the proud owner of a motor vehicle. Still, the lure of freedom is enough to have anyone saving every dollar they can.
Insuring A Car
Next in line is the most consistent payment you’ll have to make towards your car. There’s no escaping insurance unless you fancy a hefty ticket and other legal ramifications. The average cost of car insurance in the US in 2020 was $2,388 per year or $199 a month. There are lots of car insurance discounts you can access – such as the full payment discount, no DUI discount, and federal employee discounts. You’re best off comparing different insurance deals to see which accepts discounts and where the cheapest offer is.
Car insurance in the US covers multiple things split into categories. Property insurance covers any damage or theft of the car. It also covers your liability – if you’re in an accident that was your fault, your insurance will cover the cost of damages to their car and sometimes legal fees. Finally, it’ll cover medical expenses such as rehabilitation and sometimes even covers funeral costs. There are multiple reasons why it pays to have car insurance.
Registration and Taxes
When you get a car in the US, you have to register it. The cost of the registration will depend on what state you’re in. The maximum you should expect to pay is a one-off fee of around $200. You’ll also have to pay a sales tax when you first buy a car which can cost anywhere between $20 and $1,000, depending on the dealership and the motor you have. Compared to the other expenses needed to keep a car on the road, registration and taxes are last on the list of costs.
You don’t realize how much it costs to put gas in your motor until you become a driver. Every time a driver would ask for gas seemed an injustice until you become a driver yourself and realize how expensive it is to fill a tank and keep it full. The current average for regular gas is fluctuating around the $3.200 per gallon for regular gas and $3.356 per gallon for diesel, according to AAA gas prices. And 90% of households report spending up to $3,000 per year of gas.
Gas prices will vary. Certain economic factors play a role in the price of gas, causing it to fluctuate throughout the year. Even a fluctuation of $0.20 causes a big jump in the total cost of filling a tank. For that reason, so many people consider the fuel consumption of a car a consideration point before buying it.
Repairs and Maintenance
The final and most dreaded cost of owning a car. The repairs and the maintenance. These tend to come up at the worst time, usually at the end of the month, right before payday when funds are low. There is a long list of things we could discuss that might go wrong with a car.
Tires are probably the most frequently changed part of any car. A good set of brand new tires costs anywhere between $100-250 per tire, but they’ll last well over 12 months. Part-worn tires are much cheaper but last for a fraction of the time.
Another part that needs maintaining is the engine oil and filters. You can purchase engine oil online or in stores, but it’s essential to look in the motor manual or research which oil is correct for the car. Oil filters can be changed by a mechanic and should be changed once every couple of years.
One of the most common repairs that happen on a motor is a battery replacement. Whether it’s old age or a fault, batteries aren’t exactly an expensive repair, but you’re likely to have to replace one at least once or twice as a driver. Depending on the make and model of the motor, batteries are typically between $50 to $120.
There’s no sugar coating it; owning a car is expensive. That’s not necessarily a negative – it’s the reality for all drivers on the road. From the ever-increasing cost of buying a car to the unexpected repairs, owning a car will always be on the expensive side. Will that stop us from driving? Definitely not.