There’s a lot to love about owning a car. But if you’ve never owned one before, you might not realize all the expenses and maintenance that comes with car ownership. Let’s look at the basics you need to know before buying your first car and the true cost of car ownership.
It’s important to look beyond the purchase price to understand how much you’ll pay for ongoing car expenses. According to Experian, the average cost of owning a used car is $391 a month, or $4,692 per year.1 When budgeting for a car, don’t forget these additional costs:
- Registration and license fees. Your vehicle must be licensed and registered before you can hit the road. These fees vary based on the state you live in, and it’s important build these costs into your budget.
- Insurance. Auto insurance premiums are expensive for young drivers. If you’re living under your parents’ roof, they may add you to their policy. Check out the cost together and be prepared to pay for your portion of the policy.
- Gas. Fuel prices go up and down, but it can cost $20, $40, even $60 just to fill the tank on some vehicles. Buying a car that gets good gas mileage can help you save money in the long run.
- Maintenance and repairs. Car maintenance includes regular oil changes and unexpected fixes that may cost hundreds of dollars at a time.
- Parking and tolls. Depending on where you live, you may need to pay to park and pay tolls for certain roadways.
Start saving now
As you can see, owning a car is a big financial responsibility. It pays to do your homework and make a budget before buying a car. Start saving now for your first set of wheels in your Dinero Teens savings account at Advancial.