The true cost of car ownership
“The true cost of owning a car in 2023” from Money Under 30 is about new cars owned by people under thirty; I am 33 with a used car. Let’s start with a couple notes about monthly payments.
Monthly payments: According to the article, “your monthly payment typically represents ~50% of your true cost of ownership”. They say the average monthly payment on a new car is about $450. According to Experian, it’s $725. My payment on a used car is $256, I got the loan in 2019 through USAA, and my interest rate is 3.74%. It’ll be paid off in April 2024.
Maintenance: The reason for this variance is, as I can attest to from personal experience, that a Honda costs far less to maintain than a BMW. I do oil, radiator, and transmission fluid changes myself now. (I just did oil, oil filter, transmission fluid, engine air filter, and cabin air filter for about $170. It would’ve been about double to pay someone.)
Insurance: Definitely gets lower as you get older, as long as you don’t get traffic tickets. I currently have a decent rate with GEICO.
Registration, taxes, and fees: Coming from New Mexico, where I paid a flat rate of about $50/year to register my car (no inspection required), I’m mildly annoyed that North Carolina requires an inspection and levies property tax on my car annually. This year the inspection, registration, taxes, and fees were about $150.
Parking: I rarely pay for parking. $7/mo averages out parking meters and event parking.
Depreciation: My car topped out at about $30000 new; I bought it from a dealer for less than half that in 2019. The state of North Carolina now appraises my vehicle at $9840. So after 10 years it has lost 2/3 of its original value. Averaged out, that’s $168/month, but remember that the depreciation is greater early on (from new to when I bought it, the depreciation was about $190/month).
True monthly car ownership costs
| True cost | My 2012 CR-V | |
|---|---|---|
| Monthly payment | $450 | $256 |
| Fuel | $150 | $160 |
| Maintenance | $150 to $600 | $75 |
| Insurance | $150 | $58 |
| Reg, tax, fees | $10 | $10 |
| Parking | $0 to $350 | $7 |
| Depreciation | $250 | $170 |
| TOTAL | $1160 | $736 |
Even my ten year old Honda costs $8800 per year. I really should put that toward rent in a city where I don’t need a car and an unlimited transit pass is about $1000 per year.
(h/t @philritz@threads.net)