Let’s face it cars are expensive, from car payments to insurance costs to gas prices all of these items add up to a great deal of money. When I was younger I really took this for granted. As I got further and further into debt I started to look at where my money was going and I realized that my car was costing me a great deal of money.
Now when I see a young person driving an expensive car I wonder how they’re able to afford it. In order to have a nice car or even a new car most of us need to incur a lot of debt to get that vehicle. We need to find a way to finance that car somehow from loans to leasing the average new car will cost hundreds of dollars per month.
It still blows my mind just how expensive it all gets and that’s before the cost of actually driving that car. The simplest way to illustrate this is with my own costs. For the privilege of having a car I can drive whenever I want I have to pay the following on a monthly basis:
- Car Loan: $350
- Insurance: $230
- Gas: $150
- Maintenance: $50
- Total: $780
All of this adds up to just under $800 per month! The really scary thing is that I drive a used car, I can only imagine what this would be like if it was a new car. If I didn’t have this car I my debt load would decrease dramatically. Until I looked at these numbers a few years back I took it all for granted and I think that a lot of people are in the same boat. We simple assume we need to have that car and that it’s not expensive. The reality is that having a car can cost you more than you would pay for your mortgage.
There are a few things that you can do to keep these costs down. First off don’t buy a brand new car especially if you’re going to need to finance it. A used car that’s a couple years old will cost you thousands less than if you were to buy it new. The best part about doing this is that with a little effort you’re likely to get everything that you want in that car with low mileage. The next item to keep the costs down is don’t drive a gas guzzling car, with the price of gas where it is these amounts can very quickly add up to hundreds a month that could be invested or used to pay down debt.
How you drive will also affect how much your car costs you; by driving slower (aka the speed limit) you’re going to burn less fuel. Not to mention you’ll be less likely to get a ticket which will keep your insurance costs down. Also don’t be afraid to shop around when it comes to your insurance; with a little bit of looking around you can find a better deal than you have and quite possibly save you hundreds of dollars a year.
We have become addicted to our cars, our cities are planned with cars in mind and we are simply expected to have them. Going to the store or out for dinner means we hop into our cars to get there even if the place is close. The transit systems in our cities also don’t help the matter since often it’s a serious inconvenience to use public transit. If you’re looking to buy a car take a serious look at how much it will really cost you to have that car and what that will mean to your finances.