The Hidden Costs Of Car Ownership

Don’t Forget to Budget for These Expenses When Buying a Car

It’s called total cost of ownership, or TCO—the total price you pay for a car over time. Manufacturers use TCO to help you better compare vehicles. Car A might be cheaper than Car B on the lot, but over time, once you calculate maintenance and other factors, Car A might actually be more expensive.

While TCO can reveal how much a new or used car will actually cost you, it can also help you figure out how to budget for these regular expenses, because paying for a car goes beyond a $200 monthly car note. This post will give you a rough idea of how much your car will cost you annually, depending on where you live, but these numbers are based on averages and your own (ahem) mileage will vary. If you’re looking for a more accurate way to budget for your car, calculate these expenses, too:

• Car payment: If you don’t know how much your payment is already, here’s a simple calculator to help you crunch the numbers.
• Maintenance and repairs: Edmunds has a TCO calculator that will break down the year-by-year cost, depending on the vehicle. Of course, it’s just an estimate, but at least it’s based on your actual vehicle.
• Gas: This will depend on where you live, what kind of mileage your car gets, and how much you drive. Use the Department of Energy’s Fuel Cost calculator.
• Registration, taxes, and fees: Many state DMV websites have a “tax & tags” calculator that will break the costs down for you. Here’s one from CarMax, too.
• Insurance: You can look up a quote on your own pretty easily, but NerdWallet has a simple calculator that will give you a rough estimate based on your driving record and zip code.

Once you know how much a car will cost you every year, it just takes some basic math to figure out how much it’ll cost you every month (y’know, divide by 12). Like any major purchase, buying a car is not a decision to be made lightly, so make sure you know what to expect.

(LifeHacker.com)