Estimate the True Cost of Ownership of a Vehicle
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Estimate the True Cost of Ownership of a Vehicle
The following information is helpful not only for new cars but also used ones.
Things To Know
- Think of the future costs that your car will incur. They might affect your decision to buy.
The true cost
Have you considered the true cost of ownership of the car you’re interested in? Although one car you like might be less expensive to buy than another one you like, it may also carry higher ownership costs over time. This is important to remember when you just can’t decide between two choices and you need a little nudge to move you in one direction.
You might save $1,000 or so by going with one of the two, but the purchase price is only the most immediate and obvious price. Think of three, four, or ten years down the road. Is the insurance on one more expensive than the insurance on the other? How will the make and model affect your gas consumption? Will there be special maintenance needed? How does the depreciation compare? Does one of them get tax credits?
What is involved in the true cost?
You might find that you can afford to buy the cheaper one but not afford to own it as time goes on. Here are the main factors to consider when thinking about the true cost of ownership of a vehicle:
- Price you paid
- Taxes
- Fees
- Fuel
- Gas mileage
- Insurance
- Maintenance
- Repairs
- Tax credits
- Financing (interest costs)
- Depreciation
- Trade-in value
- Dealer service contract
Online calculators can help you plug in the variables above to arrive at an estimate that spans a certain time period.