So, you’re just about to buy a brand-new vehicle at considerable expense to yourself. Naturally, you’ll be pretty excited to get it out on the road, but have you considered the true costs of running it for the year?
When it comes to making a buy, we often just focus on the price of the car itself and not the costs it will incur after purchase. Here, we look at what real costs you need to be thinking about ahead of your investment.
The most obvious and significant outlay for any vehicle is regular spending on gas. Of course, the amount you’re going to be spending depends on the vehicle you buy and its efficiency.
To help you out, Time created a gas calculator where you can calculate your total costs by adjusting your annual mileage and fuel cost per gallon.
For most Americans, fuel costs will sit comfortably over $1000 a year.
Maintenance & Service
Whilst you might not expect any problems with your new vehicle, you’ll need regular servicing to keep it running at its best.
Most would recommend one visit a year for a check-up, and this should come in at around $100.
Car Tax & Registration
Motor registration fees vary from state to state and are based on the price, age, and weight of the vehicle. Thus, if you’ve bought yourself a shiny new pickup, expect to pay a higher registration fee.
Most states also have a sales tax, ranging anywhere from 3% to 8% of the value, with 5.75% being the average. If you’re in Alaska, Delaware, Montana, New Hampshire or Oregon, the good news is you might escape any taxes altogether.
Another one of the bigger yearlies spends you’ll have to make is on your insurance premium. On average, Americans are spending a considerable $125 a month on their insurance, meaning a $1500 total over the course of the year.
Whilst you’ll be profiled on your age, experience, accident history and the power of your car, your location can also make a massive difference. For example, drivers in Michigan can expect to spend northwards of a whopping $2500 on insurance a year, whilst those in Ohio are only forking out an average of $926.
For a newer vehicle, one would suspect these averages would move even higher.
The likelihood of a new car letting you down is minimal, but that doesn’t mean it won’t happen. Covering yourself with a warranty from the likes of the AA means you don’t have to worry if anything goes wrong.
With a new car, check how long the manufacturer’s warranty lasts for. Once this is over, you can utilize another provider warranty service to maintain peace of mind. Whilst this means an upfront cost, you could be saving money in the long run in the case of a major failure.
With all the above in mind, it’s clear that there’s plenty more than the cost on the car lot to consider. With an average running cost estimate of around $10,000 a year, it’s worth thinking about the finer details when it comes to buying your new car.