Many suburban families in North America are a part of the two-car families. However, due to rising operating costs of owning a car, families are deciding to downsize to one car. Before saying goodbye to the car, calculate the costs of owning a car.
Calculating the Costs of Owning or Leasing a Car
The first step is to list all the expenses related to a car. Gas, insurance, car payments, repairs, maintenance, annual government fees, and parking fees are the main fees associated with owning or leasing a car.
Gas: Estimate the number of times the family fills up the car on a monthly basis. For the month, record the total amount of gas purchased. After the month is complete, calculate the monthly costs and then multiply by 12 to get an annual estimate.
- Gas Costs/month x 12 = Annual Gas Costs
- $210/month x 12= $2520.0
Car Payments: Simple multiply the monthly car payment by 12 to calculate the yearly costs.
- Lease payments x 12 = Annual Payments
- $227.14 x 12 = $2725.68
Repairs: Calculating the repair costs are tricky. For newer cars, research what is covered under warranty and calculate based on this information. For older cars, research what may have to be done in the next year to keep the car running smoothly. One option is to take it to a garage for a free inspection estimate. Take the information given from the free inspection to estimate the costs. Often free inspections will estimate the costs of repairing the car.
- Repair Costs + Repair Costs + Repair Costs = Annual Repair Costs
- $30.0 (windshield wiper) + tires ($886.00) + Windshield Fluid ($5.75) = $921.75
Maintenance: Most cars have maintenance every 3 months or every 5000 kilometers. Oil change and tire rotation are just a few maintenance checks. Estimate the expense based on the model and year. Since maintenance costs fluctuate dependent on the check up, simply add the expenses to calculate the yearly costs.
- Maintenance + Maintenance + Maintenance = Annual Maintenance Fees
- $50.0 +$120.0 + $50.0 = $220.0
Licensing Fees include all government fees associated with leasing or owning a car.
- Driver license renewal + annual sticker = Annual Government Fees
- $75.0 + $74.0 = $149.0
Parking fees are calculated by adding all the fines. Best to pay the fines as soon as possible to ensure not having to pay late payment fees.
- Parking fees + parking fees = annual parking fees
- $40.0 + $0 = $40.0
Car Insurance is simply calculated by multiplying the monthly fee by 12 months.
- Insurance/month x 12 = Annual Insurance Expense
- $160.0 x12 = $1920.0
Annual Costs of Driving an Automobile
Estimate the expenses by adding lease ,government fees, insurance, gas, repairs, maintenance, parking fees all together,
- $2520.0(lease) +$275.68(gas) +$921.75(repairs) +$220.0(maintenance) + $149.0(licenses) +$40.0(parking) +$1920.0(insurance) = $8496.43/year
The estimate was $8496.43/year for having the privilege of owing or leasing a car (or gifting a car to your wife). With over eight thousand dollars there are quite a few alternatives available in regards to public transportation. It is important to get a true picture of the costs if the family is to make an informed decision to no longer finance two cars for the family.
As well, the cost of both cars need to be calculated to decide which car is the better option for the family. For instance, the car lease payments in this example is based on a Chevy Optra. The car payments for a Honda Civic or Subaru Outback will vary significantly from the Optra. Also, it is important for families to research the public transportation options. An urban community has more services available than a rural community.
Calculating the annual expenses of a owning or leasing a car is a wonderful opportunity to decide if one car can be cut from the household operating costs. Often families need to reduce costs in the family budget and becoming a part of the one-car family movement is a viable alternative.