So you’ve saved up your money for months or even years, and you finally have enough for a substantial down payment on a new car. You’re also preparing to save for upcoming expenses such as car repairs and regular maintenance like oil changes and car washes. But have you budgeted enough money to account for all the costs of driving?
Owning a car comes with a myriad of expenses. Some are expected, like paying for gas, and some completely unexpected, like getting caught in a car-denting hailstorm. According to a study from AAA, when you add it all up, the average cost of owning a new car is $706 per month, or $8469 a year. Those numbers may be shocking to you, and below, we’ll go over eight unexpected costs of driving that contribute to these costs. While some of these expenses are inescapable, others can be avoided.
Whether it’s your fault or the fault of the other driver, accidents happen every day all over the world. And if you regularly commute for work, you know just how many bad drivers are on the road. In the modern age we’re living in where distractions are everywhere, it’s easy for a second of not paying attention to put a dent in your bank account.
Financial gurus often suggest that you get a high deductible on your car insurance to pay lower monthly rates. But if you take this advice and get in an accident, you may be on the hook for more money than you’ve saved. The accident may not even be your fault, but what if a car hits you in the parking lot and doesn’t leave a note? Or what if you get in an accident and the other car flees the scene? Even if it’s not your fault, you can still be stuck with a significant bill to fix your car.
2. Rental Car Costs
Having your car go into the repair shop is an ordinary expected expense that you might have prepared for with a sinking fund. But what isn’t expected is having your car sit in the shop for multiple days. If your car insurance doesn’t include a rental car clause, you’re now on the hook for paying for a rental to get you through the next few days.
3. Electronic System Fail
Electronics are our best friends until they aren’t. We’ve all had plenty of electronic devices that we loved dearly until we hated them with a passion because they stopped working. Modern cars have technology galore, which means there are a plethora of items that can fail at any moment. That giant touch screen is amazing until it stops working, and you can’t control anything inside of your car.
If your fancy adjustable mirror stops working and stays in a permanent folded in position, you’ll have no choice but to get it repaired. And to fix a mirror, the dealership often must remove and replace the inside of the car door. What looked like a minor repair has now turned into a massive one.
4. Tickets and Parking Violations
No one ever plans on getting a speeding ticket, and when you do get one, they generally aren’t cheap. In some states like Indiana, a speeding ticket can cost you as much as $250.
Parking tickets are the same way, especially if you live in a big city. No one parks in a spot and expects to see a violation notice under their windshield when they return. But maybe you missed the street cleaning sign or didn’t notice that you parked in a spot that required a permit. Worse yet, if you already had unpaid tickets and this was your third violation, you might be greeted with a boot disabling your car until the tickets are paid.
The only thing worse than seeing your car with a boot on it is not seeing your car at all. And if you unknowingly parked in a tow zone, returning to a missing car can be a cruel reality. When your car gets towed, you have the towing expense to pay, you’ll have to pay a cab to get to your car, and then you’ll have to pay a ticket that likely has extra fines added on before you can get your car back. Then you have to consider the opportunity cost of the time you just wasted.
Say you got lucky, and this is just your first or second ticket. You better pay that ticket right away, because if you fail to pay promptly, you’ll be hit with a late fee.
Speeding tickets can be even worse. Depending on what state you live in, if you get a certain amount of speeding tickets in a year, you can lose your license. While you can apply to be allowed to drive your car to work, you aren’t guaranteed to be granted that temporary license. So now you’re stuck taking the bus to work, adding another expense.
5. Normal Wear and Tear
No one thinks about the regular wear and tear on their cars. You probably aren’t budgeting for a new set of tires, which could cost you $500. Also, consider the nicks and scratches on your car that don’t get noticed until its time to sell, at which point the dealer or car buyer points them out as reasons to offer you less money.
6. License Plate and Registration Costs
When you buy a new car, you’ll usually have to pay a registration fee that can range from $200 to $600. Then you have your annual license plate registration, which will cost you another $100 a year.
7. Gas Prices
The price of gas is always fluctuating, and sometimes it can get wildly out of control. One day you’re paying $2.50 a gallon, and a week later, prices have surged up near $4 a gallon. That could cost you $20 more per tank with weekly fill-ups, which could add up to $80 a month for as long as the gas prices stay high.
8. Opportunity Cost
When you add up all of these unexpected expenses, the opportunity cost adds up exponentially. Every time you have to pay for an unexpected cost of driving, that’s money that you could have been investing in the stock market.