Driving is one of the most common ways of transportation for Americans, and buying a car is a significant investment. However, most people usually only focus on the price of purchasing a car, without considering the daily or annual expenses needed to maintain and operate the vehicle, not to mention the cost of car insurance and parking for those living in major cities.
Not to mention the cost of buying a car, just adding up the expenses outside of the purchase, Americans on average need to pay about $12,600 annually to own a car, equating to around $1,050 per month.
First is the depreciation of the car. As the car ages and is used more, its value continues to decrease until the day you finally sell it or trade it in for a new one. According to statistics from the automotive industry financial technology platform Way.com, the average car value depreciates by about $4,600 annually.
Next are expenses for gasoline and insurance. These costs vary by region, but generally, Americans spend about $2,200 per year on gasoline and around $1,700 on car insurance.
Then comes car maintenance, including oil changes, tires, brake pads, air filters, windshield wipers, and addressing any other issues that may arise throughout the year.
Of course, these costs can vary greatly depending on the condition of the car, but on average, the typical American spends about $1,500 annually on car maintenance.
Less noticed are financing costs and taxes, which combined, amount to around $1,600 annually.
Lastly, there’s the parking fee. While this may only apply to those living in large cities, on average, the typical American spends around $1,000 annually on parking.
When broken down, these expenses may not seem like a huge burden individually, but when totaled up, they could exceed your psychological expectations.
(Information reference: The Congressional Hill Report)