The Unseen Costs of Car Ownership


When we go out car shopping, we typically think of two main expenses: The purchase price of the vehicle, and the fuel needed to power it. Everything else tends to fly under the radar.

It may not be in the front of our minds, but it is certainly in the pages of our checkbook. Whether we plan for those other costs or not, they’ll still come. And if we don’t make plans to handle them, they will be a very unpleasant surprise.

Of course, as long as we really think through the costs of car ownership, we can budget for these things and all will be well. So let’s take that approach and review the expenses associated with owning a car.

A lot of these costs depend on whether it’s your first car or if you are just replacing one. If you’re just now getting your first vehicle, you’re building all these costs from a current level of zero. If it’s a replacement, some of the costs are already there but may change. So as we address each expenditure, we’ll look at the first-car vs. replacement-car side of things.


If you’re borrowing money for a car, full coverage insurance will be required. If you’ve paid cash, you’ll still need to have liability coverage. It used to be very difficult to find out what insurance will cost you, but today many sites like offer online calculators and quotes that can give you an idea of how much you’ll need to budget.

For your first car, this will be a big jump because you’re paying nothing right now. If you’re trading in a vehicle that is paid off, you may have already reduced your coverage to liability only. Either option will give you an increase, so an online source for a quote will be very helpful.


The routine mechanical care of your vehicle is something you should never neglect. Oil changes, tire rotation, and filter replacement are essential for long life and for top performance, so you should budget for the appropriate schedule of care, based on the owner’s manual.

While many vehicles today include a limited amount of free service, there will still be other costs to consider. These plans don’t cover tires, for example. Before you buy, make sure to compare the cost of tires for your new car. They may be much higher than tires for the old one. And don’t neglect plans for inclement weather.

Evolving Fuels

Wait a minute. Gas is gas, right? Yes, for right now. But things are changing.

Over the last decade or so, standards for diesel engines have changed dramatically. The government requirements for emissions have become much stricter. Right now, that has mainly impacted the purchase price, but look for a day when diesel fuel must have further additives or chemical changes to reduce its carbon footprint.

This matters to you even if you have a gas engine, because there’s always a chance that other fuels are eventually targeted for changes. If you’re thinking of splurging on a guzzler, you might think again. As an example, Great Britain has already instituted a plan to end production of all petroleum-fueled vehicles by 2040.

Buying a car is always expensive, and most of us put a lot of work into figuring out how to manage such a big outlay of money. Like any financial situation, the reality can end up very different than the expectation. This happens when we make incorrect assumptions about what’s ahead.

As long as you work to capture a complete picture of the costs of owning a car, you’ll be able to make a financial plan and avoid the unexpected financial crunch of an incomplete budget.


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