Owning a vehicle may cost more than you think. Whether you’re making monthly payments or you own your car, do you know what you’re actually paying to drive? Many people forget that what you’re paying goes well beyond the sticker price. We’ll break down individual expenses so you can find out exactly what you’re paying to drive your car.
1. Monthly payment
The first thing to consider when purchasing a vehicle is how much do you want to spend? Are you in a position to make a monthly payment, and if so, how much are you looking to spend on your car payment each month? The average monthly payment for a used car is $372 while the new car average is $523.
If you're looking to avoid a monthly payment and would rather purchase a vehicle outright, make sure you know how much you can save by the time you need a new vehicle and weigh the options between buying outright and making a monthly payment.
Regardless of a monthly payment or purchasing outright, paying for auto insurance is required for all Minnesotans who drive. Although there are many different payment terms for insurance (monthly, every six months, etc.) and companies that offer different rates, this is a cost you’ll incur as long as you own a vehicle.
Make sure you’re checking your rate and communicate with your insurance company to see if there are any discounts you can receive on your policy. In 2019, the average monthly auto insurance payment is $98.
3. Fuel costs
Having a vehicle to get around is great. But commuting to school or work, driving to other activities, and hitting the road for a vacation all costs money in fuel prices. Understanding how much fuel will cost every month is important in understanding how much your vehicle will cost overall.
If you were to drive 15,000 miles a year, you would pay roughly $145/month in gas. If you have a long commute or take multiple trips, this rate will increase. But, if you’re able to carpool or leverage public transportation you could save big on your monthly fuel payment.
4. License, registration, and taxes
Although a generally small fee when it comes to overall cost of driving, keep in mind that you’re responsible for registering your vehicle every year. Depreciation will drive down the cost of your registration in Minnesota, but each year there will be a fee. Take a look at what registration will cost you in 2019.
This amount will depend on what you put down, the length of your loan (if you have one) and the interest rate at which you bought your vehicle. Although this is generally lumped into your monthly car payment, it’s important to understand the difference between your car payment and the interest paid on top.
6. Maintenance and repairs
Regular maintenance like oil changes are a budgetable expense that you can prepare for when owning a vehicle. As for maintenance, these are unexpected expenses. Keep in mind, if your car is under warranty you won’t have repair costs for many of the things that could go wrong with your vehicle. But if your vehicle is no longer under warranty, make sure you’re prepared to cover any repairs that may come your way.
Although you see the sticker price of your vehicle, it’s important to keep in mind the other costs that you’ll incur while owning a vehicle.
Visit the #1 used car dealer in the Twin Cities
No matter if you've been planning to purchase a new vehicle or need one in a pinch, everyday at Poquet Auto is a great day to get a great price on vehicle. As the leading pre-owned car dealer in the Twin Cities, you’re sure to have a great experience when you visit Poquet. From the moment you step in the door, our professional staff will help you find the best vehicle, no matter the make, model, or price you’re looking for.