The average amount of money it costs to drive a car each year provides a snapshot of drivers' spending habits. On an individual level, the cost of car ownership varies widely from one model to another and also depends on how much you drive. These factors may influence your buying decisions, as well as your driving choices.
Yearly Costs of Owning a Car
As you budget for your car, be sure to include the annual cost of insurance, gasoline, maintenance, and parking. According to the AAA Motor Club, the cost to own a car is approximately 52.2 cents per gallon in addition to any car payments you may make; that's up 1.9 cents since 2008. To put that in perspective, if you drive a new car approximately 15,000 miles per year, it will cost a whopping $7,823 per year.
According to AAA, the type of car you drive does matter in calculating the annual cost. If you choose a small sedan, like a Chevy Cobalt or Ford Focus, expect your annual costs to be lower, due to lower cost of fueling the vehicle. On the same token, a larger sedan like Chrysler's 300 or a Ford Taurus will cost thousands more. Fuel costs make an SUV one of the most expensive types of cars to own.
How to Calculate Your Average Annual Costs
When calculating all of your expenses, don't forget to include the following:
- Gasoline costs
- Insurance premiums
- Registration, taxes, and titling fees
- Maintenance and repair expenses
- Parking fees
Figure these costs by month and year. To find out your average yearly car costs, add several year's car expenses together and divide by the number of years. This will give you a sense of how much you need to budget per year, provided you don't change cars and gas prices don't increase rapidly.
Plan for Maintenance
Remember, according to Sandy Bosserman, Service Manager of Enchantment Ford in New Mexico, the average maintenance you should expect to spend on a new car during the first year of driving is approximately $400. For every year after that first year, expect to add $200 to $400 in maintenance fees to the cost to own that car.
Remember Other Fees
Insurance, registration, and parking fees will vary depending on where you live. Some states charge high amounts to register a vehicle, while others charge a straight tax and titling fee based on the weight of the vehicle. If you're not sure how to figure insurance, registration, or parking fees, call around and find out how much these items cost in your area.
Other Monetary and Non-Monetary Costs
The cost of driving your car isn't limited to the money you budget for transportation. Depending on your values, you may also want to consider these other costs of driving an automobile:
- Environmental costs from driving carbon-emitting vehicles
- Law enforcement requirements
- Ambulance and EMT support due to vehicle accidents
- Environmental clean-up costs associated with roadway rainwater runoff
- Freeway and roadway maintenance costs in the form of taxes
Lower Your Annual Car Costs
Driving is expensive, and sometimes, it isn't even necessary. You can also save by making informed car buying decisions. You can cut down on your annual car costs by following these tips:
- If you live in an area that offers effective public transportation, utilize it. Save even further by buying monthly passes.
- Ask around the office and see who lives near you. Even going two to five miles out of your way will cut down on costs if every car-pooler agrees to chip in weekly or monthly and take turns driving.
- How far is it really to the office? Could you walk it? If you can, think how you'll not only save on driving costs; you'll be getting healthier too!
- If you're not into walking, why not try a bike? Today's bikes are safer and are offering more storage space options. Motorized scooters are also becoming popular.
- Many grocery stores are offering discounted gas prices at their pumps if you shop at their supermarkets. Even a savings of four-cents off a gallon of gas will cut down on your costs.
- If your SUV is a gas hog and you drive it everywhere, think about buying a less expensive car for jaunts back and forth to work, especially if you are the only one in the vehicle. Save the SUV or minivan for multi-person outings and family adventures.
- If your older car is running fine, don't invest in a new one. If you do buy a new car, pay cash if you can. Adding interest and financing to your average annual costs will make your price tag much higher.
The True Price of a Car
The average annual cost of a car will continue to rise each year unless smart consumers pay attention to what they are driving and how they are driving. You can counteract this trend by finding ways to save money and reduce other non-quantifiable costs. Your budget will thank you!