Hidden Costs of Owning a Car

If you live in Washoe County (or anywhere besides New York City) you probably need a car to get around. Buying a new car is an exciting and proud moment, no matter if it is your first commuter car in college, a new minivan for your expanding your family, or a new sports car after you finally made enough hard earned cash.

There are some hidden costs associated with being a car owner, not just your initial down payment and your loan payment.

Insurance

A big hidden monthly cost of driving your new vehicle is car insurance, so look at your options and see who can offer you the best coverage for the best price. It is important to reevaluate your insurance every few years to see if you are getting the best deal you can. Also, roadside assistance is not always included in this estimate, so make sure you add that on when you are asking for a quote.

Maintenance

Every 5,000 miles or so, you will need an oil change. This can range from $50-$100 and you will probably need about two oil changes per year. Tires can also be a huge hidden cost, costing hundreds of dollars when needing new tires. You may also need other maintenance on your vehicle, even if you have not been in an accident. This includes things like air filters, new batteries, etc. Once you have a new car, you want to keep it clean, (I hope) and car washed can be another $10-$20 a month.

Gas

Okay, maybe this one isn’t hidden, but it can be a huge cost that you may not have accounted enough for in your budget. With gas prices fluctuating so often, estimate how many miles you drive a month, how many miles per gallon you car gets, and the average price of gas.

Registration

Your annual registration can cost a few hundred dollars as well. You can use this calculator to estimate how much registering your new vehicle will cost.

Depreciation

You may have a loan or maybe own the car outright, but cars depreciate like no other. Some say it is the worst investment you can make because you will never make any money off the purchase. However, most of us need cars. Just know if you are buying a brand new car, it depreciates thousands right when you drive it off the lot.

Parking

Parking can cost a pretty penny, especially in big cities. Is you do live in a bigger city, you may want to compare the prices of public transportation to parking costs.

Even though there are a lot of hidden costs, owning does have its benefits. Learn more at our free Let’s Talk seminar on car buying!

There is a lot to think about when purchasing a new car, and that can make you wonder – should I just lease a new car instead? If you are the type that wants to trade in your new car every year or so, maybe owning isn’t the right choice for you.

Is leasing a better option?

There is no right or wrong answer here, it really does depend on your preferences and your financial situation. Benefits of leasing can include much of the maintenance and repairs being paid for, lower monthly payments, and being able to trade in for a newer model after a few years! However, if you do not choose to buy the car at the end of the lease, you do lose the money you paid monthly for the lease.

Great Basin offers another option – the Payment Saver Loan – which offers the low monthly payments of a lease, without all the heavy restrictions and hidden costs of leasing.