What Is the Total Cost of Owning a New Car?

If you were to ask any vehicle owner, there’s no doubt they would have an endless list of advantages of owning a new car. A new car is a reliable method of transportation, and many individuals take pride in knowing their investment will pay for itself over time.

However, people don’t often discuss the expenses associated with owning a vehicle. So what is the total cost of owning a new car? Read on to discover car ownership expectations to keep on your radar so you don’t encounter any unpleasant surprises.

Car Payments

Making monthly car payments on a new vehicle is the most significant expense to expect. With the average monthly payment above 500 dollars, it helps to review some factors that determine your monthly expense.

For example, you may want to review the length of your auto loan. Most auto loans are 72 months; however, you can request modifications as necessary. Your down payment can also dramatically affect the amount of money you borrow. In general, you should strive for a down payment of at least 20 percent of the vehicle’s price.


Filling up your gas tank is an obvious expense that affects drivers and their wallets. Based on how often and how far you drive, your vehicle may call for a weekly or bi-weekly refill, which will add up.

The average cost of gas per month is 120 dollars, so consider a vehicle with adequate fuel economy to help you save some money.


Insurance is another significant expense to account for when budgeting for a new car. If leasing the vehicle, your policy may require collision insurance and liability coverage. Your policy amount may also reflect on the type of vehicle you own; for example, luxury vehicles tend to contribute to a higher premium.

Your driving record is another variable that insurance companies factor into your premium. Individuals without clean driving records can expect higher premiums because auto insurance companies may view hazardous drivers as a risk. Remember to drive safely to avoid tickets and other infractions that could negatively impact your driving history.


While you don’t have to worry about much maintenance with a new vehicle, there may come a point during ownership where tune-ups and realignments are necessary. Your new vehicle may follow a set maintenance program for its first three to five years to support its functionality and longevity.

On average, you’ll want to budget 100 dollars a month to cover the average cost of yearly maintenance, including oil changes and tire rotation.


The overall costs of owning a new vehicle don’t stop at maintenance. Your vehicle will undergo a yearly registration process to ensure that it remains legal to operate. Costs may be higher during the first few years but decline as the vehicle ages.

Between car payments, insurance, maintenance, gas, and other fees, the total cost of owning a new car can depend on a number of different factors that can make exact calculations challenging. Other costs related to owning a car can vary due to your financial situation.

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