Having to invest in a new vehicle is something you might encounter after your old car breaks down, when it’s time to upgrade, or after you’ve been involved in a serious accident. However, if you haven’t been in the market for a vehicle for a while or if this is your first purchase, it can be overwhelming to try to figure out the true cost of owning a vehicle. There are many different factors that go into purchasing a new car but you should also consider the potential costs of fuel, maintenance, repair, and the general depreciation of the vehicle.
It’s no surprise to most people that new cars depreciate rather quickly. Depreciation, however, isn’t the only cost you should contemplate as you’re purchasing a new vehicle. A recent study from AAA shows that even if you exclude insurance cost, you’re still responsible for paying for repairs, maintenance, and fuel. On average, this adds up to more than $8,500 every year. This is what it costs to own and operate a new vehicle in 2017 and that adds up to $706 per month. Whether you have to buy a new vehicle after a car accident or because it’s simply time, knowing your options and carefully considering your purchase is important.
The study found that the least expensive cars were small sedans while pickup trucks were the most expensive because they averaged $10,054 every single year. The biggest cost factored into the study included depreciation but it is also one that people tend to overlook when purchasing a new vehicle. New cars typically lose approximately $15,000 in value over the course of five years. If you’re trying to keep your costs down when purchasing a new vehicle, the best solution is to purchase a used one. While the repair and maintenance cost may be somewhat higher, you’ll pay less upfront and you’ll be able to get much more of your money back in comparison when you go to sell the vehicle. This is especially true if you purchase a used electric car.