True Cost of Ownership

You're driving by a dealership and you spot that hot new car shining under the lights. You take a closer look and it's love at first sight. The price tag says $28,000. You start mental calculations and decide you can afford it. Sounds very simple, right?


Wrong!



Owning a car has many hidden costs that even thought not substantial, would add up over time. Let's examine our case study, A 2010 Ford Mustang GT (priced at $28,395) For the first year of owning the car, you will have to pay for

•  Insurance, Of course this depends on many factors, such as where you live, your driving history, your credit history and so on, but for our study, we'll just take the one year average which is $2,000
•  Maintenance, Scheduled maintenance recommended by the factory at periodic mileage and/or calendar intervals. For one year it would be $61
•  Fuel, Based on a 15,000 miles per year average, it would add up to $2,000
•  Taxes and Fees, This consists of the base sales taxes, license and registration fees. These taxes and fees are often based on a percentage of the purchase price, and generally decrease as the vehicle ages and loses its value. For our Mustang these would be $2,400
•  Depreciation, This is the amount by which the value of a vehicle declines from its purchase price to its resale value. Assuming the vehicle will be in "clean" condition and be driven 15,000 miles per year, this would be $2,600

 The total cost of ownership of a 2010 Ford Mustang GT for one year amounts to $9,061. Which would be $755 per month. Something to think about when buying a new car.