Driving is probably the most consistent way Americans get from point A to point B across the country.
And while it’s well known that buying a car is a significant investment, most of us don’t typically factor in the day-to-day or annual costs associated with keeping our cars running and operational. Not to mention the cost of insurance for your vehicle, and for those who live in larger cities, the cost to park your car each and every day.
Adding this all together, the average American pays roughly $12,828 a year to own a car, roughly $1,069 per month, says a new study from Way.
The initial number probably seems eye-popping for sure, but when you break down the various payments on your vehicle, it slowly starts to add up.
(Way.com)
The first and largest is the depreciation of your car. While this isn’t physically money that you’re spending, it’s money that you’re losing every time you use your car. As with age and usage, the price of your car will continue to drop until the day you finally sell it or trade it in.
On average, the value of your car drops about $4,600 a year, according to Way.
Next is gas and insurance, which can vary depending on your location, but typically Americans spend about $2,200 on gas every year and $1,700 on car insurance.
After that, there’s the maintenance of your car that you end up doing every year. These include oil changes, tire rotations, brake pad replacements, new air filters, new windshield wipers and anything else that potentially goes wrong with your car in a given year. The prices on this can obviously vary drastically depending on what is going on with your car, but on average, a typical U.S. citizen will spend roughly $1,500 on car maintenance every year.
Going a little more unnoticed is the various financing charges and taxes and fees that you end up paying each year on your car and probably don’t even realize it. Combined, the two can add up to about $1,600 a year.
Finally, there are parking costs, which probably only apply to people who live in larger cities. But on average, the typical American spends around $1,000 on parking. This can vary drastically obviously for someone who lives in the suburbs versus someone who lives in a major city in California or New York.
Separately, all these payments may not seem too crazy, but when combined, it’s a bit more than the normal person may expect to pay on a car year after year.
