The true cost of car ownership is not what you think
How expensive is it to own a car?
Buying a new — or even used — vehicle is getting more and more expensive as prices surge and availability lags. But you might not know that even owning a car that’s already paid off can drain your finances.
Between fuel costs, insurance, maintenance and taxes, most car owners unavoidably have to pay thousands of dollars in additional expenses each year over the lifespan of their vehicle. The Bureau of Transportation Statistics estimates that the average cost of car ownership tops $10,000 per year. Imagine paying that over the course of several years.
Calculating the cost of car ownership
Most people think of car ownership in terms of the vehicle’s sale price, but that’s not the only hard cost associated with owning a car. Use the calculator below to see how much car ownership is actually costing you each year. If you don’t own a car and want to see if buying one fits your budget, you may look up averages for your area.
Cost of car ownership calculator
Yearly cost of car ownership
Total annual ownership cost
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If you’re considering buying a car or reducing the costs associated with your current vehicle, you’re not alone. We scoured the web and ran the numbers to find every hidden cost of car ownership and uncovered ways to make some of that money back.
Just how much does it cost to own a car?
Now that you have your costs, let’s compare them with the national averages.
Car insurance is one of the most expensive costs of vehicle ownership that you may not have factored into your purchase. According to Bankrate, the annual average cost of insurance for most drivers is $2,014, or just under $200 a month. Additionally, licensing, registration and taxes are other necessary expenses that can take a chunk out of your budget — around $80 a year in licensing and registration alone, though that varies greatly by state. Make sure to check where you live for a more accurate estimate and factor in taxes if preparing to purchase a vehicle.
What about the daily or weekly costs of vehicle ownership? Those can add up quickly, too: If you pay the national average of $3.71 per gallon for fuel and fill an average 14-gallon tank weekly, that’s $52 a week. That number can go up even higher in areas with more expensive gasoline, like California.
These examples show that owning a car requires you to pay more than your monthly payment. Speaking of monthly payments, annual interest on vehicles is rising, too. The combination of higher car prices and rising interest rates means many people pay an additional $920 annually on auto loans. Extend the life of the loan to lower the monthly payments, and those interest charges last longer and you’ll ultimately pay more.
But what about used cars?
While the price and monthly payments for a used car may be lower, pre-owned vehicles come with their own unique costs, too. Maintenance and repairs become more critical as vehicles age, especially as parts fail.
The top ways to save money on car ownership
If you’re alarmed at the average cost of owning a car — new or used — you’re not alone. Fortunately for most drivers, you can make a number of minor adjustments to daily driving habits that have the potential to add up to big savings over time. Even if you don’t use your car every day, there are still plenty of ways to cut costs or, even better, earn money from your parked car. Whether you’re considering buying a car or trying to squeeze the most mileage out of your current car, keep the following tips in mind to find savings as a vehicle owner.
Did you know you can save on gas by consolidating your trips? If you need to make a Target run and grab lunch, don’t break them into two separate outings. One longer trip running errands will pay off, as you use less gas than you would if you made two or more trips.
Do maintenance tasks on your own time
While some maintenance tasks are better left to professionals, there are still plenty of things you can do as a car owner to keep your car in great shape. You don’t need to be an expert to take care of the following:
- Maintain your tire pressure: Checking the pressure of each tire at least once a month is essential, even if you have automatic tire pressure sensors. Good tire pressure helps your car’s fuel efficiency — meaning you’ll use less gas and save at the pump — and can even prevent crashes.
- Change your wiper blades: Instead of paying the car dealership to change your wiper blades, take a few minutes to read the instructions and handle it yourself. Another option is to purchase them at an auto parts store, which may offer to install them for you for free.
- Replace air filters: Most cars have a cabin air filter and an engine air filter, which you should check once a year. A dirty air filter can burn more fuel. In many cases, you can quickly replace your filters in about 15 minutes and for as little as $20.
- Check your oil level: If you drive your car regularly, you should check your oil monthly. Look out for changes in the oil level: If it’s too low or too high, you may have a vehicle maintenance issue.
- Pay attention to warning lights: As soon as you see a dashboard alert illuminate, like your check engine light, you should take your car to the mechanic immediately. If you wait because you’re too busy or think it’s not a cause for concern, it could lead to bigger — and more costly — maintenance issues.
Be conscious about when you drive
Your car uses gasoline while it’s in motion, but sitting in traffic can really drain your tank. If you can plan your commute outside of busy periods like rush hour, try to leave the house or office a few minutes early or much later if your schedule is flexible. Pay attention to traffic reports and consider alternate routes to your destination.
Adjust your insurance
Adjusting your insurance may be a sound financial option for car owners. Consider comparison shopping from several insurance companies to find the best rates.
Depending on the age of your car, you may even want to drop optional coverage or adjust your deductible. For some used cars, buying more expensive coverage may no longer make sense, especially if the policy deductible exceeds the car’s value if it were totaled in an accident.
An idling vehicle wastes gas. If you’re going to be stationary for more than a few minutes and it’s safe to turn off the engine, go ahead and do so. This may not be possible if you’re stuck in city traffic, but if you’re pulled over and waiting for someone, turning off the engine can save some gas.
During wintertime, you may be used to starting your car a few minutes before you’re ready to leave. Modern engines don’t need extended time to warm up, so you can avoid idling in this case, too.
Don’t speed or let parking tickets stack up. In addition to being expensive, any form of a traffic citation can impact your car insurance rate. Many car insurance companies offer discounts for safer drivers, so avoiding tickets and accidents can eventually add up to big savings.
Get rid of excess baggage
Carrying extra weight can reduce your car’s fuel efficiency, so don’t leave unnecessary items in the trunk or backseat.
Stay up to date on maintenance
Don’t let small problems build up and become larger, pricier issues down the road. Stay up to date on maintenance and mileage check-ups. Regular oil changes and tire rotations can reduce expensive repair bills in the future.
It may not be easy in a climate with rising interest rates, but consider refinancing your car loan to save on the monthly payment. Shop around for the best rate to help lower your monthly payments or to pay off your car loan sooner.
Consider membership savings
Wholesale clubs offer more benefits than just bulk purchases of food or toiletries. Buying a Costco or Sam’s Club membership can help you save money on both regular auto purchases like gas and larger, less frequent ones like new tires.
Share your car on a car sharing site
If you already have a car, or want to buy one but won’t need to drive every day, you can offset the cost of car ownership through car sharing. When you partner with car sharing platforms like Avail, you can share your car with drivers who need one for a day or longer. It’s kind of like you’re renting your car to someone, but you won’t need to meet the driver or even talk to them at all. That’s all taken care of by Avail.
So what are the earnings like? Avail helps you pay off your car loan faster by paying you every time your car is borrowed, while also guaranteeing you’ll make money — at least $50/week. You can earn even more the more often your car is borrowed. Every time your car is borrowed, Avail pays you a daily rate depending on which class your car falls into. Standard vehicles, mid-size SUVs and vans earn $20/day, while large SUVs earn $25/day.
Other reasons to share your car include:
- No disruptions to your workday or routine. Remove your personal items from your vehicle and drop it off. Avail takes care of bookings, key hand-off, cleaning and refueling, so the money you earn is truly passive.
- Car sharing happens on your schedule. If there’s ever a time you don’t need your car, like while you’re out of town, you can drop it off for a week and let it earn you money.
- You receive quick payment. Avail pays you at the end of each booking after the car is returned. You can transfer your earnings to your bank account immediately or hold them for a bigger payday.
- We’ll clean your car. When you share your car on Avail, you get regular car washes to keep it fresh and clean.
- We’ll inspect your vehicle for you. To ensure there’s no damage after your car was borrowed, we’ll complete inspections to keep your car ready to share and in good shape.
- We’ll share routine maintenance costs. We’ll chip in on things like oil changes, tire rotations/replacements, brakes and fluids.
If you decide car sharing is for you, there are some easy steps to follow. Just list your car to be shared, park it at one of Avail’s convenient locations and leave the keys in the secure on-site key box. Avail pre-screens all borrowers and cleans your vehicle before and after every use. Every trip is covered by Allstate insurance, which means you don’t have to purchase additional car sharing insurance to share your vehicle.
Saving on your car
Owning a car carries a lot of additional costs outside of the car’s purchase price. Budget-savvy drivers do what they can to offset small and large expenses alike. While there’s no shortage of steps you can take to reduce the hidden costs of car ownership, car sharing is one of our favorites.
If you own a relatively new vehicle with no safety recalls and want to earn extra cash, consider car sharing through Avail in cities like Denver and Chicago. We’ve made the process as easy and flexible as possible so you can share your car worry-free. And, you’ll earn money and save space in your garage or driveway at the same time. To learn more, check out our FAQs or start sharing your car today.
Frequently asked questions about car ownership
The cost of car ownership is rarely simple, and many people have questions about it. Some of the most common concerns regarding owning a vehicle are listed below.