Photo by Negative Space.
Cars are expensive, and their massive price tag goes beyond the sticker price you see in the window at your local dealership. Drivers pay for a number of ongoing costs, so if you're in the market for a car, don't forget to budget for these.
It's called total cost of ownership, or TCO - the total price you pay for a car over time. Manufacturers use TCO to help you better compare vehicles. Car A might be cheaper than Car B on the lot, but over time, once you calculate maintenance and other factors, Car A might actually be more expensive.
While TCO can reveal how much a new or used car will actually cost you, it can also help you figure out how to budget for these regular expenses, because paying for a car goes beyond a $200 monthly car note.
This post will give you a rough idea of how much your car will cost you annually, depending on where you live, but these numbers are based on averages and your own (ahem) mileage will vary. If you're looking for a more accurate way to budget for your car, calculate these expenses, too:
- Maintenance and repairs: Depending on the vehicle you could be paying a lot of maintenance over the years. Best case scenario you are able to buy a new car with plently of spare parts available, of course not everyone can afford to buy new so just be aware when buying older cars that there will be more costs down the line.
- Petrol: This will depend on where you live, what kind of mileage your car gets, and how much you drive. Use this Petrol Cost calculator to find out how far you can go per litre.
- Registration, taxes, and fees: Many of Australia's Roads and Maritime Services websites have a online transaction section so you can check just how much registration and fees will be.
- Insurance: You can look up a quote on your own pretty easily.
Once you know how much a car will cost you every year, it just takes some basic maths to figure out how much it will cost you every month (y'know, divide by 12). Like any major purchase, buying a car is not a decision to be made lightly, so make sure you know what to expect.