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The Real Cost of Owning a Car

The Real Cost of Owning a Car

By Matt Diehl • August 31, 2016

Purchasing a vehicle is a pricy investment. However, the sticker price is not the only cost you will incur. Maintenance and repairs will be necessary throughout the life of the vehicle and incrementally add to the original dollar amount you paid.

Some of these expenditures can be less impactful if you are aware of them upfront. To give you an idea of potential expenses today and down the road, let's take a look at the real cost of owning a car:

Taxes, license and registration fees

When you purchase a new or used vehicle, there are a variety of fees and taxes that come with it. Several factors can affect what you end up paying and the final amount may be surprising. If you’re unclear on any of the charges, ask the salesman for an explanation.

Common factors that influence what you pay include:

  • Vehicle weight
  • County of registration
  • State of registration
  • License plate type

To find out what your possible fees could be, try this tax and tags calculator based on your state.


Unless you pay for a vehicle in cash, you will need to finance the purchase. Interest rates vary based on factors such as income and credit score. If you need a copy of your credit score, every consumer is entitled to one free copy per year at

If you have never financed a vehicle before, it may be worth doing your research before signing the dotted line. Do you buy or lease? Direct lending or dealership financing? Should you ask for someone to cosign your loan? For a full explanation on vehicle financing, you can reference the article, Understanding Vehicle Financing, by the Federal Trade Commission.

Insurance premiums

The cost of insurance premiums vary by policyholder and vehicle type. Here are some of the main factors that influence how much you pay for insurance:

  • Driving history - tickets, violations
  • Driving habits - daily commute, business, recreational
  • Vehicle status - new, used
  • Vehicle size - small, midsize, large
  • Engine type - high performance, standard
  • Credit score - higher scores could receive lower premiums


Rising fuel costs have been a hot topic for decades but there is good news to share: in 2012, the federal government finalized standards to increase fuel economy to the equivalent of 54.5 miles per gallon (MPG) for cars and light-duty trucks by model year 20251. Consumer savings will be comparable to lowering gasoline to $1 per gallon. Even so, fuel costs will always be a recurring expense but can be less impactful by driving more efficiently2.

If you’re looking for tips and advice to save on fuel costs, please visit, the official U.S. government source for fuel economy information.


Although tires are an important safety feature on any vehicle, they can often be overlooked. Some people don’t acknowledge their tires until they experience a blowout or a noticeable leak. If you suspect your tires need to be replaced, consult a professional mechanic or visit a tire shop.

The price of a new set of tires depends on size, tread life and manufacturer but it is common to pay several hundred dollars, including installation. According to AAA’s most recent Cost to Own and Operate a Vehicle report3, tire costs will average $150 in 2016. To extend the life of your tires and potentially save money, you can have them rotated every 5,000-8,000 miles and regularly check the tire pressure.

Maintenance and repairs

Like any machine made of metal, cars require routine maintenance and repairs to operate at peak performance. Regular maintenance such as oil changes may be inexpensive but major repairs can be very expensive. To help avoid these costly repairs you can follow the recommended service schedule for your vehicle.

For your reference, the top 10 car repairs of 20154 include:

  • Replacing an oxygen sensor – $249
  • Replacing a catalytic converter – $1,153
  • Replacing ignition coil(s) and spark plug(s) – $390
  • Tightening or replacing a fuel cap – $15
  • Thermostat replacement – $210
  • Replacing ignition coil(s) – $236
  • Mass air flow sensor replacement – $382
  • Replacing spark plug wire(s) and spark plug(s) – $331
  • Replacing evaporative emissions (EVAP) purge control valve – $168
  • Replacing evaporative emissions (EVAP) purge solenoid – $184


No matter what preventative measures you take, depreciation is the one cost variable that is hard to avoid. According to Kelley Blue Book (KBB), a leading vehicle valuation and research company, the average car will be worth 44% of its purchase price after five years5. Depreciation represents the loss in value based on the national Manufacturer Suggested Retail Price (or MSRP), economic factors and historical data.

Proper maintenance and care can increase your vehicle’s resale value but used car prices are ultimately influenced by supply and demand. If the market is flooded with your vehicle, it will depreciate more. If you are in the market to sell your vehicle, try these tips to increase your car’s resale value.

The nuts and bolts

Owning a vehicle is a financial commitment that can last several years. While some costs are unavoidable, others can be offset by awareness, acquired knowledge and preventative maintenance. Hopefully this article topped off your tank!


The information in this article is provided for general education and informational purposes only, without any express or implied warranty of any kind, including warranties of accuracy, completeness or fitness for any particular purpose. It is not intended to be and does not constitute financial, legal or any other advice specific to you the user or anyone else. The companies and individuals (other than OneMain Financial’s sponsored partners) referred to in this message are not sponsors of, do not endorse, and are not otherwise affiliated with OneMain Financial.