What’s the Total price of Owning a Car?


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Calculating the total cost of owning your vehicle – or one you may buy soon – is the greatest method to make sure your auto finances are in line.

The average payment per month on a new car was $523 in the first quarter of 2018, based on credit rating agency Experian. But that’s far from the real cost to possess a car.

For vehicles driven 15,000 miles annually, average car ownership costs were $8,469 a year, or about $706 a month, in 2017, based on AAA. However, that does not include the whole payment per month, only the price of interest on a auto loan.

Use NerdWallet’s total car cost calculator to determine just how much you’re really spending each month. Then you can better understand where you can cut costs.

*Note: The total car cost calculator is pre-populated with estimates according to data from Experian, AAA,?the Bls and the National Conference of State Legislatures. See our methodology below.

How to calculate your overall cost of car ownership

The calculator is pre-populated with estimates according to 15,000 miles of driving each year, so we strongly urge you to definitely enter your exact expenses to see your total car costs.

Monthly car payments and insurance costs are self-explanatory, but here’s a lot of estimating other costs of car ownership.

+ Calculating costs for a car you do not have yet? See average payments here

Average… New cars Used cars Leases (new)
Source: State from the Automotive Finance Market, Experian Information Solutions Inc.
Monthly payment $523 $372 $436
Loan amount $31,455 $19,536 N/A
Loan term 69 months 64.2 months 36.5 months

+ See auto insurance estimates in your state with this tool


If you are aware how much you usually invest in fuel, enter that amount within the calculator. Otherwise, divide the amount of miles you drive each month by your car’s gas mileage rating, on FuelEconomy.gov. Multiply time through the price of a gallon of gas in your area.

Maintenance and repairs

If your vehicle isn’t under warranty, put aside some cash for repairs.

You won’t have repair costs if your car continues to be under the included factory warranty – typically three years/36,000 miles – or if you bought a long warranty.

However, the average price of repairs, maintenance and tires is $99 a month for a new car, according to AAA. Common maintenance costs include oil changes and tire rotations, which are usually done at 5,000-mile intervals or, within this scenario, 3 times every year.

If your vehicle isn’t under warranty, set aside some money for repairs, whether they’re needed every month or otherwise. If you want to dig deeper in to these expenses, look at estimates on Kelley Blue Book or Edmunds.com for cars less than Five years old.

Registration, fees, taxes and miscellaneous

This part is simple: Just place in your annual automobile registration renewal amount, divided by 12. Add any other recurring expenses such as parking costs.

Depreciation and also the price of owning a car

In their newbie, cars lose around 20% to 30% of their value.

Although you do not create a payment per month for depreciation, cars do lose value with time, which affects your overall price of ownership. Within their first year, cars lose around 20% to 30% of the value. Over each one of the next 5 years, depreciation is between 15% and 18%, based on Black Book, which tracks used-car pricing.

To get an idea of how much your car has depreciated, find your car’s resale value and compare it to how much you paid.

While it is possible to manage depreciation, you typically have less control over this expense once you own your automobile. Buying cars that hold their value could save you money in the long run.

Saving in your biggest car costs

To cut car costs, look at big-ticket items first: your vehicle payment and insurance premiums.

By reviewing the total cost of ownership, you can observe the part of income that goes toward your car each month. It’s best to cut back than 15% to 20% of your take-home pay on vehicle costs.

If you find you’re over your vehicle budget or if you wish to reduce spending, look at your big-ticket items first: your vehicle payment and insurance costs. To obtain the biggest savings, consider refinancing your vehicle loan or looking for lower car insurance rates.

For more cost-cutting tips see these smartest ways to reduce car expenses.

Staff writer Jeanne Lee led to this report.

Calculator methodology

The averages and estimates accustomed to prepopulate this calculator come from several sources.

  • Estimates for brand new and car or truck payments come from Experian’s Q1 2018 State of the Automotive Finance Market report.
  • Gas was calculated using 15,000 miles per year, average gas mileage of 25 miles per gallon and $2.91 per gallon, the typical from the June 2018 Consumer Price Index in the Bureau of Labor Statistics.
  • AAA’s most recent Your Driving Costs study provides annual average costs for insurance, maintenance and repairs with different new vehicle owned for 5 years and driven 15,000 miles annually. We’ve converted these figures to monthly amounts.
  • Registration fees vary widely by location. Based on the National Conference of State Legislatures, the fees vary from $15 in certain states to $274 or more in other people, depending on vehicle cost, size, age and other factors. Based on the stated high and low fees, we estimated a typical $145 for that annual state registration fee.

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