| The actual costs of owning an automobile depend, | | | | record, number of drivers who will be driving the |
| to some extent, on where you live. Generally, | | | | vehicle, the distances driven and other factors. |
| owning a car is more expensive in a city; where | | | | The amount of your deductible and the type of |
| you may need to pay for parking and face higher | | | | insurance coverage (bodily injury, property |
| insurance premiums - and less expensive in a | | | | damage, medical payments, comprehensive, |
| suburban or rural area. But you may be surprised | | | | collision, emergency roadside service, car rental |
| to know that the average US household spends | | | | expenses, etc.) you elect will also impact the cost |
| almost 20% of its total income on car related | | | | of your insurance premiums. You can ask a local |
| expenses. So where does the money go? | | | | insurance agent how much you might have to |
| Fuel | | | | pay to insure the car you're considering. You can |
| Obviously, your car needs fuel to operate. And | | | | also get free insurance estimates on the internet. |
| while hybrid cars, which use both gasoline and | | | | Lost Value |
| electric power, are becoming popular, gas could be | | | | One significant, yet often overlooked, cost of |
| a major item in your budget, depending on the | | | | auto ownership is depreciation, or loss of value. A |
| type of vehicle, how far and how often you plan | | | | new car typically loses about 35% to 40% of its |
| to drive. | | | | value within the first three years - starting the |
| Maintenance | | | | day you drive it home. After that, most cars' |
| You should also consider maintenance - which | | | | depreciation rates level out to about 7% to 10% |
| generally includes the cost of new tires, oil | | | | per year. While you won't actually pay out of |
| changes, car washes, engine tune-ups - and | | | | pocket for depreciation, this loss of value is a |
| repairs. It's wise to budget about $30 (or 0.10% | | | | cost of ownership because what you own is |
| of the median new car price of $25,500) per | | | | worth much less than you paid for it. For that |
| month in regular maintenance for a new vehicle | | | | reason, you may still wish to research vehicle |
| and about $50 per month for one more than 3 | | | | average residual values before you buy a car - |
| years old. Repair costs, while low on a new car, | | | | often, a little extra cost upfront (both your time |
| can easily run into the thousands on older cars. | | | | and money spent) may save you money in the |
| Insurance Costs | | | | long run. |
| Next, you need insurance. In fact, in most states | | | | Leasing guides can be a good source of residual |
| you can't register your vehicle without proof of | | | | values, whether you plan to lease or not. Ask |
| insurance coverage. Insurance costs vary | | | | your bank or look on the internet, lease guides |
| dramatically according to your area, age, driving | | | | such as the ALG guide are readily available. |