Calculating Vehicle Cost of Ownership in Greenville, NC

How to Calculate Vehicle Cost of Ownership at Barbour Hendrick Honda

Deciding whether you can afford to purchase a new Honda? Get a better idea of how a new vehicle can fit into your budget by using the tips and advice from the Barbour-Hendrick Honda Greenville finance department. We'll show you how to calculate the full cost of owning a vehicle so you can make the best financial decision.

To ensure that your next vehicle fits into your budget, it's important to calculate all the usual expenses associated with owning a car. This will give you a complete understanding of the cost of ownership and help you determine whether you can afford to add luxurious features such as massaging seats, a HEMI V8 engine, or a rear-seat entertainment system.

Monthly Car Payment

When considering the affordability of a car, most buyers typically focus on their monthly payments. According to Experian, a credit reporting agency, the average monthly payment for a new car is currently $725 (as of August 2023). However, it's important to note that this amount may vary depending on the make and model of the car you choose. By selecting a more economical option, such as a Honda Civic, you can potentially save money on your monthly payments. But the cost of the car isn't the only part of your monthly car payment. Embedded in your car note is the cost of financing, which is a great opportunity for you to save money.

When you take out a loan, the interest is a significant part of the total expense. For example, if you bought a car for $30,000 with a 60-month payment period and a 6% interest rate, you would have to add another $4,799.04 to the total cost. This equates to an additional $179 per month. To reduce the expense, it is advisable to search for a loan with the lowest possible interest rate that you qualify for. This may result in a significant reduction in your monthly payments.

Car Insurance

It would be frustrating to be responsible for paying for a vehicle you no longer possess. Fortunately, car insurance offers benefits like gap insurance that will cover the remaining balance of your car in the event of an accident. Additionally, operating a motor vehicle in the state of Colorado requires car insurance. The cost of insurance is determined by various factors, such as your driving record, the value of your car, and the coverage you select. It is advisable to acquire estimates from trustworthy insurance agencies to factor in insurance costs into your monthly expenses.

Fuel

Gas prices can fluctuate due to various factors, such as the season, market, and supply chain. It can be difficult to determine the exact cost of fuel. However, according to the American Automobile Association, the average person pays about 18 cents per mile for gas. The average American drives 15,000 miles annually, so this means an estimated $2,700 is spent on fuel every year or $225 per month. To save on gas, there are gas price apps available to track the cost of gas at local stations. It is important to ensure that traveling to a station with a lower price does not add extra mileage to the trip.

Registration and Fees

The amount of taxes and fees you'll need to pay for your vehicle depends on its make and model, as well as the state and city it's registered in. To get an accurate estimate of the fees and registration costs in Colorado, it's best to look them up. However, if you're looking for a rough idea, the average car owner in Colorado pays around $675 per year in taxes and fees.

Maintenance and Repairs

It costs money to keep your car in pristine condition. According to Bankrate, the average American spends between $370 and $786 on maintenance costs per year. So, you will need to set aside $31 to $66 per month for maintenance.

Find a Car You Can Afford at Barbour-Hendrick Honda Greenville

This information can be used to determine the total cost of a vehicle and help you choose the ones that fit your budget. When you're ready to find your next vehicle, come visit us at Barbour-Hendrick Honda Greenville.