The True Cost Of Car Ownership – Midweek Infographic

FerrariOwning a vehicle should be one of your top expenditures throughout your lifetime. Typically, the only category that places ahead of autos is housing and perhaps education if you attend a high-priced private school or pursue a post-graduate education. When we think about auto expenses, we factor in the purchase price, maintenance, insurance and often gas, but there are other costs that you may not be considering. Also, you may incorrectly assume that some categories are more expensive than you think.

Today’s infographic does a great job at listing the costs involved with autos as well as the percentage that each cost takes up. It also lists the types of vehicles that are the most expensive to own as well as the cheapest.

 car ownership costs infographic

This infographic starts by listing the top six expenses you can expect to incur when owning a vehicle: depreciation, fuel costs, insurance, maintenance/repair, interest and taxes. What might surprise some people is the fact that depreciation comes in first by a long shot – 46% of the total figure. While people realize that cars depreciate, they often do not factor that into their overall costs. This is necessary though, as depreciation is an indirect cost that will still impact your purchasing power.

To lower the impact of depreciation, I always recommend buying used. Vehicles lose a massive amount of value the day you drive them off of the lot because they can no longer be sold as new. Typically, within the first three years, cars will depreciate at the fastest rate and after that, the pace of depreciation will slow down. Taking care of your paint will also slow down depreciation, such as by using a clear bra.

This principle can be seen in the third section. The graph shows that over time, carrying costs decrease while the operating costs go up. Operating costs would be maintenance/repairs – the costs to keep the vehicle operational.

I find the next part very interesting. This may be painful for some, but it’s a good idea to calculate the amount that your vehicle costs for each mile that you drive. This can easily be done by adding up your costs for the entire year and dividing by the miles driven. As this graphic states, the average person “pays about $58 in vehicle expenses per 100 miles driven”. This statistic may cause some people to cut back on the miles they put on their vehicle.

If you’re in the mood to buy a new car make sure you run a vehicle history check first. Companies like CarVeto UK and Cazana provide free and paid services that ensure the vehicle is free from outstanding finance, major accident damage or mileage problems. All you need is a vehicle registration number to start!

READERS: Who wants to share their average cost per mile driven? Do you buy typically by used or new cars?

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Comments

  1. When you put it in costs per 100 miles driven, it’s pretty bad ! Luckily I rarely ever drive my car long distances, so hopefully that will keep costs down.

    • That will definitely keep costs down when it comes to maintenance and gas.

      However, other costs will remain the same; so, lowering your mileage will actually increase the cost per mile. I guess the thought is that you should get some use out of your vehicle while it is depreciating and you’re paying insurance.

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