The Real Costs of Car Ownership

Buying your first car is an exciting experience. What many new car owners don’t consider is the actual costs of owning and operating a vehicle. For many, there’s a lot more work and more expenses involved than they anticipated.

According to data from Canadian Automobile Association and Globe Drive research, the average annual cost to own and operate a vehicle is $10,452 a year. This figure is based on the cost of running a 2012 Toyota Camry, 18,000 km a year, with the cost of gas set to $1.23/litre, with regular maintenance and repair.

For starters there are the obvious expenses such as gas and snow tires. But there are also several things a first time car owner may never have thought of, or if they did, never realized how much they would cost per year.

First let’s discuss insurance. Insurance for a red 4 cylinder Honda Civic is roughly $2,000.00 dollars a year. This includes:

• 500 comprehensive deductible
• 500 collision deductible
• 1,000,000 inclusive third party liability

Now I know what you are thinking, “How does someone who is in the market for a new car fail to factor in the costs of insurance?” Well valid point, the driver likely factored in insurance but didn’t realize that the colour and type of car would impact the insurance rate so significantly. Because you are more likely to get in an accident in a red car then in a black one, your insurance will be more expensive. Not to mention that because of the number of Honda Civics on the road today, statistically speaking, you are more likely to get into an accident in a Civic as well (meaning insurance is higher). Other factors include which city you live in and your age.

If you are thinking about buying a new car, driving it for a year then making your money back, think again. Depreciation essentially begins the minute your car leaves the lot. For example if you purchased a 2010 Toyota Prius your car has already gone down almost 25% since the purchase.

Sure, if you keep your vehicle until it qualifies for a $300 Recycle Your Ride government bonus, depreciation is a non-factor. But most Canadians get rid of their vehicle before it turns 15 years old and for them it makes sense to factor depreciation as a real cost.

The bottom line is, if you are beginning to think about buying a new or used car, remember to budget for everything, not just gas, insurance, and the price of the car itself. Make sure to have some money set aside for normal maintenance fees such as oil changes and changing tires, and to have enough incase of emergency (i.e. a major issue with the engine or something breaking down). Yes, owning a car can be a very freeing experience, but remember the costs that are involved otherwise the only place you will be driving is into debt.

Ronald Barthis has been building and fixing cars for over three decades. He is currently retired but you can find him almost every weekend at the local auto recycling yard Buying Up Green Auto Partsa name="_GoBack" for his various projects.

The sport of Drifting is catching on like wildfire all over the world, and that’s not exactly surprising considering it carries the most entertainment value of any motorsport out there.