Do you know how much it costs to get around every month? Most people don’t. There are several factors that contribute to the cost of driving, including gasoline expenses, car payments, maintenance costs and car insurance. Here’s how to figure out how much you’re really spending on monthly car costs.
Cost of your car – Figuring out how much your car costs over time is simpler than calculating gasoline expenses, but you won’t really know how much a car costs per month until you get rid of it. You may have monthly car payments, but ideally you’ll still be driving it after the car is paid off. Spread the total cost of the vehicle over the entire time of ownership to get an idea of monthly car cost.
Gasoline – Gas prices, vehicle fuel efficiency and driving distances vary drastically, so this figure can be difficult to determine. The easiest way to calculate how much money you spend on gas every month is to keep a log. Track your gasoline expenses every time you fill up, and check the odometer to figure out how far you drive every month. After a few months, or ideally a whole year, you can figure out how much you’re spending on average per mile in gasoline.
Maintenance and insurance – These monthly car costs are lumped together because they’re easy to determine. Every time your vehicle is serviced, record the expense. Car insurance premiums are usually a flat rate every month, and won’t change often. If you have affordable auto insurance, it can help bring your total monthly car cost down. To find affordable insurance, request several auto insurance quotes before you pick a policy.
How does it add up?
Imagine two hypothetical drivers:
Jack is 21 and bought a 15-year-old, well-worn car for $1,000. He drives less than your average motorist at 10,000 miles per year. His insurance is inexpensive for such an old vehicle, costing Jack $45 per month. But the old beater isn’t as fuel efficient as it once was, getting only 24 miles per gallon. During the two years Jack owned the vehicle before it died, he spent a total of $1,600 in maintenance and repairs. If gas prices were $3.50 per gallon on average, Jack’s total vehicle cost would be $5,138.33. Spread out over two years, that would bring his monthly cost of ownership to $214.
Jill is 35 and bought a brand new car for $28,000. She logged 14,000 miles per year with a fuel efficiency of 30 miles per gallon. Jill had the car serviced regularly and kept it running for 15 years. Her car insurance was high at first, but lowered gradually, averaging $60 per month. Maintenance costs came to a total of $4,000 during the life of the vehicle. Using the same gas price estimation as Jack, Jill’s total vehicle cost comes to $67,300. Spread out over 15 years, Jill spent $373.88 per month.
Through these examples, you can see how several different factors come into play when determining your car cost per month, and how small expenses can add up over time. Remember to take all of these factors into account when calculating your monthly car cost and budgeting for a new automobile.