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Having a car can open up a new world of opportunity. In fact, many people feel trapped without one. With a car of your own, your travels are no longer confined to public transit routes. Maybe you can find a higher paying job with the freedom of a car. Road trips and access to outlying entertainment destinations are other liberating benefits enjoyed by drivers.

However, the costs of owning a car can be sneaky since they don’t hit your wallet all at once. With ownership expenses on the rise, you just might shatter your budget if you don’t know about them all from the start.

Fuel

Even if you drive a hybrid, there’s no doubt that you know exactly how expensive gasoline has become. An average driver can spend hundreds of dollars each month on fuel. Drivers of diesel cars have been affected by rising gas prices more than others have. Not long ago, the price of diesel fuel was low enough to give cars nearly twice the mileage-per-dollar over unleaded gasoline. Those days are gone. Buying a diesel car will no longer save you any significant gas money.

Maintenance

Like any other complicated machine, cars need maintenance to keep on working. It is the most important way to avoid repair costs. Prices vary widely from location to location. In the examples below, we are looking at a total maintenance cost of well over $2000.

Routine car maintenance includes:

  •     Oil Changes
  •     New Tires
  •     Water Pump Replacement
  •     New Timing Belt
  •     New Battery
  •     Wheel Alignment
  •     Replace Spark Plugs
  •     Flush and Replace Radiator Fluid

Your car’s manual will tell you when maintenance is required. Neglecting maintenance will lead to repairs that could have been avoided.

Repairs

No matter how well a car is maintained, it will eventually need to be repaired. Parts get old and break. Speaking of breaks, brake work is one of the most common repair costs. It’s actually basic maintenance. However, your car’s manual won’t be able to predict when you’ll need brake work. That depends on your driving style.

Parts that commonly need repair are:

  •     Ignition System
  •     Fuel Pump
  •     Transmission
  •     Exhaust
  •     Light Bulb Replacement

Of these examples, transmission repair is by far the most complicated and expensive. For older cars, the costs of this repair will often add up to more than the vehicle itself is worth.

Insurance and Registration

Car insurance is very expensive, but rates vary quite a bit from company to company. Your age, car and driving record are also important factors when it comes to cost. To get the best price, it’s important to shop around for insurance that caters to your demographic. The annual insurance cost is likely to fall between $400 and $5000, depending on your desired level of coverage. Some states require car owners to pay for regular emissions testing. Your car has to be registered with the Department of Motor Vehicles once a year. There is a fee, though the cost depends on where you live. A car insurance comparison company did a very similar take on this article, it would be interesting to see things from the side of Kanetix.
Choosing the right car for your budget is the most important thing you can do to minimize your cost of ownership. Costs change drastically based on the make and model of a car. Think about what kind of car you need. How large does your car have to be? AAA estimates that small sedans have the lowest ownership costs, while SUVs cost nearly twice as much to own.

James Derrick is a Journalism Student from Montreal, Quebec. He has a passion for personal finance and hopes to one day inspire millions to save money effectively. He is the self-proclaimed king of frugal living.