The True Cost of Car Ownership: From Monthly Payments to Maintenance

Informed buyers know that there is more to car ownership than just the loan payment. The true cost of car ownership extends way beyond just the monthly car payment to the credit union. From car insurance and registration fees to property taxes and regular maintenance, it is important to know everything that car ownership entails to ensure you make educated decisions when it comes to buying and owning a new vehicle.

Understanding the Full Spectrum of Car Ownership Costs

While the exact cost of car ownership will vary depending on the type of car you own, where you live, your driving record, and more, there are still some costs and expenses that remain constant.

Initial and Fixed Costs

• Car ownership costs begin with the initial purchase of the vehicle. This includes the down payment, sales tax, title charges, license plate registration, and other fees associated with the purchase of a new car. 

• In addition, there are fixed annual costs associated with car ownership that include annual auto insurance premiums, registration fees, and associated taxes for ownership of the vehicle. Fortunately, most auto insurance companies offer monthly payment plans or allow you to purchase 6-month policies for better affordability. 

Variable Expenses

• Car owners should also expect additional expenses when it comes to their vehicle purchase. There are variable costs like fuel expenses, routine maintenance, and even unexpected repairs that need to be considered. And while regular routine maintenance will help extend the life of your car, it won't completely ensure you don't have unexpected repair costs from time to time. 

• Savvy car buyers can also prepare for unexpected car expenses by using financial safeguards for added protection. Purchasing extended auto warranties can save on covered mechanical issues that could otherwise break the bank. Also, obtaining a GAP coverage policy can help eliminate possible out-of-pocket expenses if there is a financial gap between your loan balance and insurance settlement while offering peace of mind that you won't continue to owe  for a vehicle you can't drive.

Here's a guide to help you navigate through the complicated car buying process: Click here to Download Now

Budgeting for Your Vehicle: Keeping Costs in Check

These practical budgeting tips can help you effectively manage ongoing vehicle expenses and keep costs down. 

• Creating a designated savings account for both expected and unexpected car-related expenses will help your finances stay on track. Definitely include both variable and fixed costs like fuel expenses, insurance, routine maintenance, and saving for unexpected repairs in your monthly budget. 

• Set up your car payment to be automatically deducted from your paycheck, as a recurring payment through Online Banking or use Bill Pay to ensure payments are made on-time. This will help you avoid paying late fees and will keep your credit in good shape. 

• Shop around for insurance to compare costs and coverages before your insurance renews. Get quotes from different providers to make sure you're getting the best deal. Members of Allegiance Credit Union can receive a free quote from MemberHaven Insurance Agency, an independent agency owned by a group of the strongest and most innovative credit unions in the state of Oklahoma. 

• Make on-time car and insurance payments to ensure you are up to date. This will help you maintain good credit, positive relationships with lenders and insurance companies and fosters good financial habits. 

Leverage Financial Tools to Plan for Car Ownership

Allegiance offers a variety of tools and resources to help you plan and finance your new car purchase. Here’s how we can help!

• Allegiance's Car Buying Guide: Our “Car Loans 101: Your Guide to a Smooth Car Buying Experience” can help you gain a better understanding of what to expect when purchasing a new or pre-owned car. From guidance on finding the right vehicle to securing the best Auto Loan, our Car Buying Guide is a great tool to help anyone who is preparing to buy and finance a new car. 

• Auto Loan Calculator: If you want to know exactly how much you can afford to spend on a new vehicle, Allegiance’s Auto Loan Calculator is available to assist buyers when it comes to estimating their monthly payments and overall affordability. Simply enter your vehicle and finance information to determine your monthly car loan payment or purchase price. Easy-to-read graphics show you how different loan terms or down payments can impact your monthly payment. Use Allegiance’s Auto Loan Calculator now.