How much does your car REALLY cost you?

Some might ask what the selling price of your vehicle was? Others might ask you what your monthly payment was? But the true cost of your vehicle is more than that. On a monthly basis, your vehicle costs the sum of:

1. Your monthly payment;

2. Cost of Insurance;

3. Cost of Gas (this is a big one);

4. Cost of maintenance (e.g. oil changes, etc.);

5. Cost of repairs (divide any repairs you did this year by 12 for a monthly average); and

6. The cost of depreciation (which is the loss of value of your vehicle).

Typically, the cost of a vehicle costs around $1,000 per month. Consider the math. A $400 monthly payment + $350 in gas + $50 in repairs and maintenance + $200 in insurance = $1,000 before you have even added in the loss due to depreciation. And depreciation can be 20% or more per year of your vehicle's value depending on how new it is and what kind of vehicle you have.

But you paid cash, so you don't have a monthly payment, right? Well take the amount you paid for your vehicle and divide it over the number of months you plan on having the vehicle (e.g. 60 if you plan on owning the vehicle for 5 years) and add the lost interest you might have earned to come up with your monthly cost. (Note: I know some of you will say - but you're using the whole cost of the vehicle over the time I have the vehicle - and I'll still have some value to trade. - - That may be true but let's count that when we realize that savings otherwise you are, in my opinion, falsely limiting the true cost of you vehicle.)

Bottom line - your monthly payment is usually less than 1/2 of your total monthly cost of a vehicle. Add parking and tolls and you'll really lose sleep.