5 Things That Make Being a Car Owner Surprisingly Expensive

DjelicS / iStock.com

Commitment to Our Readers

GOBankingRates' editorial team is committed to bringing you unbiased reviews and information. We use data-driven methodologies to evaluate financial products and services - our reviews and ratings are not influenced by advertisers. You can read more about our editorial guidelines and our products and services review methodology.

20 Years
Helping You Live Richer

Reviewed
by Experts

Trusted by
Millions of Readers

In the United States, owning a car is a fact of life for many people. Unless you live, work and socialize exclusively in areas with reliable public transportation, you probably need a car. Yet when we think about the costs of car ownership, we often consider only the purchase or lease price of the car. But there are a lot more expenses related to car ownership.

Here’s what you need to know about what those costs are and how you can minimize them.

Insurance

Car insurance is required in nearly every state — New Hampshire and Virginia are the exceptions. But even if your state doesn’t require insurance, it’s a good idea to have it. Having the right car insurance can prevent you from having to pay out of pocket if your car gets damaged, if you damage someone else’s car or if you injure someone in an accident.

According to Forbes, the average annual cost of car insurance in the U.S. is $2,150 per year. If you carry just the minimum coverage required by your state, the average cost is $467 per year. Before you call your insurance agent to reduce your coverage to the minimum required, however, there are a couple of things to know. First, if you have a loan on your car, the lender may have requirements for the amount and type of coverage you have. Also, minimum coverage usually doesn’t protect your car — it just covers damage or injury to someone else. So, you’d still pay out of pocket for damage to your own car.

Parking

If you live, work or travel to a city, you may have to pay to park your car. Street parking is usually the least expensive way to go, but be sure you read the signs. Certain spots may be limited to certain times of day or a specified amount of time. Garage parking is pricier but can be more flexible and safer. The most expensive way to park? Getting a ticket because you parked in the wrong place.

Gas

If you own a car, gas is a given. But there are ways to spend less. Know where the less expensive gas stations are near you, and frequent those. Pay cash if the station gives you a discount, and pump your own if that’s allowed and is less expensive. Perhaps the best way to save money on gas is to use less of it. Don’t go out unless you have to, and if you have several places to go, do it in one trip. And never make a special trip to get gas. Unless you’re leaving at 4:00 a.m. when nothing is open, you can get gas on the way to someplace else.

Repairs

Car repairs can be a big expense, especially for older cars. Having a mechanic you trust can go a long way toward keeping your repairs cost effective. And regular maintenance may prevent a small problem from getting bigger — and more costly.

Financing

Borrowing money to buy a car, or leasing one, means you’ll be paying interest charges which can really add up. If possible, pay cash for a car when you need one. New cars lose some of their value as soon as you drive them off the lot, so a used car will often be considerably cheaper over time than a new one.

Car ownership can be seen as a necessary evil, and being aware of how to reduce related expenses can help you save.

Share This Article: