The True Cost of Owning a Car

Everyone knows cars are expensive. In addition to the cost of acquisition, there's maintenance, insurance, and the average gas cost per year, which seems to continually increase. We all know that those costs add up, but few of us know exactly how much it really costs to own a car. Let's take a look.

Government Estimates

According to Consumer Expenditures in 2019 by the U.S. Department of Labor's U.S. Bureau of Labor Statistics, the average vehicle costs $10,742 per year to own and operate. The breakdown of the figure comes to $4,394 for purchasing the vehicle, $2,094 in gasoline and motor oil expenses, and $4,254 in other vehicle-related costs.

Statistics From the American Automobile Association

The American Automobile Association (AAA) also compiles statistics on the cost of driving and has been doing so since 1950. In its 2019 Your Driving Costs survey, it summarizes the cost of gasoline, maintenance, insurance, license and registration, loan finance charges, and depreciation costs for a variety of vehicles.

According to AAA, the average person spends $9,561 per year for the privilege of driving. The numbers also don't include the cost of parking.

Minimize Your Costs

Regardless of how much you spend on your car each year, less is always better. Although eliminating all spending on transportation isn't practical or possible for most people, there are steps that can be taken to keep your costs low.

For starters, if you don't drive much, leasing a vehicle may be right for you.

If public transportation goes to the places that you need to be, you should seriously consider its merits. Not only does somebody else do the driving, but taking public transportation can often reduce your monthly transportation expenditures by a significant amount. Buses, trains, subways, and vanpools all provide relatively inexpensive alternatives to driving yourself to work, and you don't have to pay for their maintenance.

Carpools are another great option. Just because you own a car doesn't mean you always need to drive it. Taking turns with a friend can save you money on the average gas cost per year and save wear and tear on your vehicle.

If you work odd shifts or can't access public transportation, you might have no choice but to own and use your own vehicle. If that's the case, think small. Remember those numbers you looked at earlier? Driving a small sedan is likely to cost in the neighborhood of 60.6 cents per mile versus 87.4 cents for a gas-guzzling SUV, which amounts to a 44% savings per year! It's also a good move for the environment and, since you have to breathe the air too, a good move for your health.

Similarly, don't pay for an eight-cylinder engine when four cylinders will work just fine. Unless you're hauling heavy loads on a routine basis, the extra cost of a bigger engine results in more money spent on gasoline.

Whatever you are driving, make a conscious effort to drive it less frequently. Walking or biking to local destinations is good for your health and good for your budget. When you do drive, consolidate your trips. Go to the shopping center, the bank and the dry cleaner all in the same trip instead of making three separate trips.

Conclusion

Regardless of how you get from place to place, pay attention to how much you are spending. This includes ancillary costs, such as car insurance and regular maintenance. By keeping an eye on your expenses, you can keep more money in your pocket.