If you’re a driver, you’ve undoubtedly thought about how much it costs to buy a car. Maybe you’ve lusted after a $500,000 Lamborghini, while knowing you can only afford a $20,000 Honda Civic. And you’ve probably considered the cost of purchasing a car when you’ve created your family’s budget.
But have you ever wondered how much it costs to own a car? Costs of ownership include items like gas, registration fees, insurance, maintenance, and depreciation. When you think about how the cost of those items varies widely, it’s no surprise that the cost of ownership varies widely depending on the car.
In general, smaller cars not only cost less to buy (which results in lower financing costs), they also cost less to own. They are usually more fuel efficient (so you save on gas), and cheaper to maintain. They even depreciate less than larger cars. So overall, smaller cars have a smaller impact on your finances. That’s something to take into consideration when you are selecting a car to purchase.
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AAA conducts an annual “Your Driving Costs” study. Results released in April 2013 concluded that the average sedan costs $9,122 to own and operate each year; a minivan costs $9,795 to own and operate; and an SUV with 4 wheel drive costs $11,599. Of course, your individual costs will vary depending on the specific car you drive and how many miles you put on it each year.
You can reduce your car ownership costs by buying a late-model used car, which will reduce the amount of depreciation, and following basic maintenance guidelines and driving safely, which will help keep repair costs to a minimum. Selecting a fuel efficient car may reduce the cost of gas, but keep in mind that some fuel efficient vehicles like hybrids can cost more upfront.
If you want to calculate the cost of owning a car before you purchase one, you can obtain a copy of AAA’s “Your Driving Costs” brochure at your local AAA branch, or use the “True Cost to Own” calculator at Edmunds.com or similar calculators at other sites.