My dad is a great guy.  As a teenager, he purchased cars for all of his sons (four of us).  Although he never purchased us new cars, he always managed to find the money to buy us our own wheels.   At the time, as a teenage kid, I really didn’t appreciate getting stuck with a used car but in retrospect it was probably one of the best decisions my dad had made for his kids.
By owning a used car, I learned first hand what a money pit cars could be and how I should budget for future “problems” that I knew would arise.  I learned first hand what components fail on an older car and how to be proactive about maintaining them.  Had my dad bought us new cars we wouldn’t have learned any of these things so here is a list of things that you need to factor in when buying a car (new or used).

The purchase price of the car is only a small portion of the expenses you will incur to operate and maintain the vehicle.

Other expenses include:

  • Auto insurance $50 – $150/month (and more depending on various factors)
  • Annual inspection  $40/year (fees vary by state)
  • Tax assessment $70/year (fees vary by state)
  • Gas $100/month (vary by your usage; I spent $200/month!)

Preventive Maintenance:

  • Oil Change every 3000 miles or 3 months ($25/quarter)
  • Battery Replacement ($50 – every 2 yrs – I always replace after two yrs, worst thing is a dead battery on a cold lonely night)
  • Fuel Filter Replacement ($200 – every 4 yrs – I had two cars that ended up with clogged fuel filters; messes up fuel injection)
  • Transmission Fluid Replacement ($200 – every 4 yrs – I had to replace transmission on car)
  • Tune up ($100 – every 2 or 3 yrs – One small problem will lead to other big problems if you don’t do this)
  • Brake pads ($300 – every 3 yrs or sooner depending on the size of your lead foot)
  • Tires ($400 – every 2 or 3 years – Tires can last longer but I replace them every 2.5 years for safety reasons)
  • Windshield Wipers ($10 every year)

By performing preventative maintenance, I have managed to keep my vehicle in relatively good condition.  I have two cars that are now 10 years old and they both run fine.  There are other expenses too however that creep up.  My a/c went out twice and cost about $500 to fix.  Although I have yet to lose a belt or hose I know a few people who have this problem frequently (mostly Chevy).

And lastly, there are the cascading expenses that arise from simply owning a car that you forget to even think about:

  • If you live in a major city, it is likely you might have invested in a toll lane tag.  Can siphon at least $20/month from your cash flow
  • If you live in a major city, you will likely have to pay for parking $50+/month
  • If you live in a major city, you will ikely receive a parking ticket, speeding ticket or some type of moving violation ticket at some point in your future – $20 – $200/year.
  • Of course, owning a car requires some tender loving care: Car washes $15; Floor mats $30; Leather/Fabric cleaning $20;
  • Car seats if you have kid(s); $60/each
  • The convenience of having a car also makes it easy to go through all those fast food drive thru restaurants
  • The convenience of having a car also makes frequent visits to the grocery stores and malls a reality

Of course then there are the really optional cascading expenses for vehicles:

  • Specialized Rims
  • Vanity license plates
  • Tow/Hitch
  • Window tinting

on and on and on…..