In the car buying world, the words “cost to own” get thrown around quite liberally. For those outside the industry, it can seem like a non-defining and ambiguous combination of words. So what do those “experts” mean when they say those three key words? Here’s the basic and general breakdown of the cost to own for a vehicle.

Things Taken into Account

The main things looked at when calculating the cost to own involve purchase price, depreciation, and out of pocket expenses. When comparing cars, it’s about more than just the sticker price. One car may save you a little up front, but nail you with costs in the long run.


This is the biggest expense apart from the purchase price. New cars depreciate the minute you drive off the lot. While there’s no way of getting around this, you can always look at past records of car brands and models and the depreciation associated with each. Believe it or not, some brands hold value much longer than their counterparts. Value holding trends are always smart to look into and take into consideration when making that decision between car A or B.

Out of Pocket Expenses

State fees, fuel, insurance, repairs, maintenance, and financing are all added into the “Out of Pocket” category of expenses. This varies from state to state, and vehicle to vehicle. Finding the best rates and warranties could save you quite a bit. It also helps to have a clean driving record to push down those insurance rates as well.

Other Considerations

While “cost to own” is not an exact science it is a pretty good indicator of what you can expect to pay. As mentioned before, these costs vary depending on where you are, how often you drive, how you drive, age, and other factors. Owning a car is almost never an investment for your bank account, but rather an investment in transportation and convenience. Knowing what you’ll be paying for in the next 5 years can make a difference in numbers, which ultimately could affect your decisions today.

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