Do you know how much your car really costs? We do! Lucky for you, we’re happy to share. Here’s what you need to know.
Let’s talk about True Cost to Own (TCO). If you’re wondering exactly how much your car is costing you every year, visit this cost calculator and enter your information. Does the number surprise you?
Now you have your number. What does it mean and where do those costs come from? We’ll explain.
What Your TCO Means
There are a number of factors that go into the cost of your car, from monthly payments to depreciation to insurance and more. In fact, here’s a quick list of all the monthly costs that you need to factor into car ownership.
- Car payment
- Maintenance and repairs
- Registration fees
In 2017, for vehicles driven 15,000 miles per year, the average ownership costs were found to be almost $8,500. “Yikes,” you may be thinking. You had no idea your car could be costing you so much.
Thankfully, your car gets less expensive the longer you own it. This may seem counterintuitive, but it’s true. The biggest chunk (40%) of your yearly car cost comes from the depreciation hit, which is big in the beginning but decreases more and more over time. While it’s not a cost you “see,” it still impacts the overall value of your car, which is something to keep in mind.
Relatively speaking, maintenance and repair costs aren’t actually that much in the grand scheme of things, even though a repair bill can seem like a big chunk of change at the time. It’s certainly more cost-effective to keep up with your maintenance and repairs than buy a new car every few years and deal with car payments and the depreciation hit all over again.
Have more questions about the True Cost of your car? Drop us a line anytime!