BUYER’S GUIDE: The Real Costs of Owning a Car

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Looking at the sticker in a new car’s window, it might seem like your biggest financial concern is the purchase price. It’s definitely the largest number you’ll have to deal with when you’re buying a car, so it tends to get all the attention.

Unfortunately, there are many other costs associated with owning a car and it’s important to have those budgeted in from the start. Here are the costs you should be ready for so you’re not unpleasantly surprised and caught without enough cash in reserve to keep your new ride on the road.


Gas prices may be low today, but there’s no guarantee they’ll stay low. Remember the rush to trade in gas guzzlers when gas prices spiked? If you buy a car with poor fuel economy, then you could be in trouble when prices rise.

Figure out how much you drive on an average day, but don’t count only your commute. You probably stop and run errands, maybe go out to lunch, and take side trips. All those miles add up.

Make sure you figure in extra miles for road trips. Whether it’s a short drive for a day’s adventuring or a multi-day road trip, you need to account for all the miles you drive.

Once you have those numbers, figure out how much it will cost you in gas with your proposed new car. Use the fuel economy estimates on the window sticker, but remember, those are only estimates. If you drive with a lead foot, then you’re going to get lower numbers and spend more.

Figure out if you can afford to fill the tank at today’s prices and then figure out if you can afford to fill up if prices rise. The more you drive, the more you need to pay attention to a car’s fuel economy when you buy a vehicle to be sure you’re ready for anything at the pump.

There’s a balancing act here where it might make sense to buy a more expensive car if it gets better fuel economy. Hybrids are the perfect example. You’ll pay a premium to own one, but if you drive a lot, then the gas savings might make a hybrid the best choice.


Depending on your state, the car you want to buy, and your driving record, insurance can take a big bite out of your budget. Driving without insurance isn’t permitted everywhere and it’s a risky bet, especially with a new car.

It’s best to ask your current insurance company what your new rate will be on a specific car, before you commit. They can give you a quote right over the phone.

Have your top three or four picks ready so you can see how much each car will cost to insure. The difference between models can be surprising and it can be a dealbreaker. Safety features can reduce your rates, so be sure to figure out how much you’ll save by paying for those features on your car. It could be worth the price in insurance savings.

Once you’ve decided on a car, shop around at several insurance companies to be sure the one you’ve been with for years is still the right one for you. Sometimes you can get a great rate by switching, but make sure that rate isn’t a temporary number for new customers destined to go up when your policy renews. Periodically check your rates even after you’ve made your purchase to ensure that you can’t do better elsewhere.


Maintenance costs can be one of the most challenging aspects of owning a car. Some you can predict, but others come up out of nowhere.

Even if you buy new, wear and tear can happen unexpectedly with perfectly good tires suddenly needing replacement if you drive over unseen debris. You’ll also need to replace wipers, keep your car clean, and get regular oil changes to keep your car in good shape. Be sure to budget enough for maintenance costs right from the start to keep your car in good condition.

Don’t let problems slide, either. The benefit to keeping up with maintenance is that you’ll pay for small problems before they turn into big ones. Waiting too long to put on a new set of tires is dangerous and could result in an accident. If your car has a problem, get it fixed as soon as possible.

There are recommended maintenance schedules in every car’s owner’s manual. See what’s recommended and make sure you’re ready as maintenance expenses come down the line. Many cars come with standard maintenance included for a limited number of months. This can save you money and make it easier to buy some cars than others.

It’s a lot less painful to take care of small repairs as they happen than it is to ignore them until they cost big bucks to fix. Make sure you have enough money budgeted to keep your car running.


Uncle Sam takes his cut of pretty much everything, starting with taxes levied when you first make your purchase. Sales taxes add a big chunk to the intitial cost of your car, but those aren’t the only fees the government will collect.

There are registration fees, emissions fees, and inspection fees that need to be paid regularly. Many states determine the registration fees partly on the value of your car, so they can be hefty when a car is new. They’ll go down over time, but make sure you have enough to register your car once you sign on the dotted line.

If you’re not sure how much it will cost to register your car, then call your town hall and ask. Be ready with detailed information about the car and the clerks can give you a good idea of what you’ll have to pay.


Everyone knows that cars depreciate over time, but no one really thinks about what this means for their wallet. You don’t have to pay this every month or budget it like you do expenses, but it does matter when it comes time to sell your car.

If you’re planning on keeping your call until it’s good and done, then depreciation may not matter so much. If you’re planning on keeping it only a brief while and then selling it, then it matters a lot.

Investigate your car’s resale value before you buy. The brand you choose also affects depreciation with some doing better than others thanks to long-term quality studies.

It’s no fun buying a car that costs so much you can’t afford to drive it anywhere and have a little fun. Keep these tips handy when you’re ready to buy, and you’ll be able to calculate the full financial impact of your purchase.

Tell us in the comments – what are your top considerations when budgeting for a new car?