Total Cost to Operate a Vehicle
This calculator will help you to understand the true cost of owning and operating your automobile. First enter the total purchase price of your vehicle, sales tax percentage, annual cost of licensing the vehicle, and the cost of the extended warranty, if applicable. Then, from the pull-down menu provided, indicate whether or not you plan to finance your vehicle. Next input your down payment, financing rate (APR), loan term in months, and your annual insurance premium. Follow this with the number of miles you expect to drive annually, your car’s MPG rating, and the local cost of gas per gallon. Finish up by inputting the car’s age, the amount of time you plan to operate it, and an estimated dollar amount for monthly repair and maintenance costs.
Press CALCULATE, and you’ll quickly discover the true costs associated with purchasing a car and operating it over a given number of years.
Current Auto Loan Rates
The following table shows currently available automotive loan rates in for new and used cars. Adjust your loan inputs to match your scenario and see what rates you qualify for.
See The Whole Picture on Your Costs
Owning and operating a motor vehicle is a privilege, one that is so impactful that you must be licensed in order to legally drive on the roadways. And as you are probably aware if you've recently started looking into buying a personal automobile, it isn't without its expenses. In fact, the freedom that comes with owning a motor coach is far from free. And if you don't understand the potential expenditures going into buying a vehicle, it could become a rather pricey noose around your neck.
Like any type of consumer purchase, buying an automobile requires some research on your part. So if you're interested in enjoying the convenience that comes with owning and operating a vehicle, you must first understand the fiscal responsibilities associated with the prospect. Here are a few of the expenses you don't want to overlook.
There's no getting around the fact that purchasing a vehicle is a huge expense, at least for most people. Unless you happen to have the cash on hand to fully cover the sticker price, you're probably going to end up financing the lion’s share of the purchase. And taking out an auto loan means paying interest for the duration, increasing your overall cost for the vehicle even further. Unfortunately, your expenditures don't begin and end with the price of purchasing an automobile.
Technically, this isn't the same as owning a vehicle, but for all intents and purposes, the practical applications are the same; you'll have an automobile for your exclusive use for the duration of the contract, so long as you pay in full and on time. In a sense, you will own the vehicle until you return it to the dealership. The major difference is in the expense associated with virtually renting a vehicle instead of buying one. You'll end up paying a lot less money no matter how it shakes out.
Your monthly payment will be based on the assumed depreciation over the course of your contract, which amounts to significantly less than the price of purchasing a vehicle, so monthly payments will be lower. When you return the vehicle at the end of the term, you can select a newer model and negotiate a new contract. If you decide to keep it, you'll be able to take out a loan for the remaining amount, thus saving yourself hundreds or thousands in interest charges that you would have paid had you taken out a loan for the original price of the automobile.
Although there are a handful of states that eschew sales tax, you can't buy cars there and then register them in your home state without getting charged. So if you happen to live in Alaska, Delaware, Montana, New Hampshire, or Oregon, congratulations! You won't pay sales tax on your vehicle purchase. As for everyone else, you're out of luck. So before you buy, it's a good idea to try to calculate what you'll pay in tax. This way, you won’t be surprised by a final purchase price that exceeds your budget.
Any time you purchase a vehicle or enter into a contract to borrow one for a couple of years, you're going to end up paying fees. Fees for paperwork, fees for filing, fees for financing - there is no shortage of fees to be paid. Unfortunately, these add-ons will vary from one dealership to the next, and even from one automotive purchase to the next. So it can be difficult to plan for them. What you might want to do is call dealerships you're interested in visiting ahead of time to try and get a breakdown of their standard fees.
Aside from the purchase price of your vehicle, automobile insurance is likely to comprise your largest expense where your personal transportation is concerned. And it's not always easy to determine the potential expense. This is because insurance is based on myriad factors, including your age, your driving record, the number of policies you carry with an insurance provider, the number of drivers in your household (and their ages and driving records), and of course, the type of vehicle you drive. So until you buy your new car, it can be difficult to determine how much your insurance will set you back each year. And it pays to understand that certain features can make a difference. For example, you'll probably pay a higher rate for a sporty two-door than you will for a family sedan. After all, the risk of accident in a speedy coupe is statistically higher.
In addition to regular insurance premiums, you might want to consider adding gap coverage. This type of policy covers the gap between what you owe on a vehicle and the actual value, which is the amount your insurance provider will probably cover in the event of an accident where the vehicle cannot be salvaged. With gap coverage, you won't end up owing money on a vehicle that is no longer usable. In some cases, this coverage is required by your lender, but it's generally up to you whether you want the additional protection until your auto loan is paid off.
The price to register a vehicle varies by state, but like insurance, it is also based largely on the type of automobile you drive. Of course, where registration is concerned, this has more to do with the overall value and less to do with the specific features of an automobile. You'll notice that this expense decreases year by year as your vehicle loses value.
Unless you have a crystal ball, you can't really plan for all possible maintenance and repair costs. But at the very least, you need to plan for known expenses like fluid changes every 3,000 miles and major service every 15,000. If your vehicle is under warranty, some charges may be covered, especially in the case of needed repairs or parts replacement. But generally speaking, you'll be on the hook for standard services like oil changes and so forth. Luckily, you can do some calculations to estimate costs by considering how many miles you tend to put on your vehicle annually.
The problem with petroleum products is that they're a limited commodity and we rely on imports to get the fuel we need. This has led to plenty of price hikes over the last several decades. This can definitely make the process of planning for auto-related expenditures difficult. But as with maintenance, you can get a rough estimate based on the amount you drive, using current prices at the pump as a point of reference. It may not be entirely accurate due to price fluctuations, but it's a place to start when planning your automotive budget.
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