I like to consider myself a fairly frugal car person. Probably because as any Real Car Person would tell you, I’m not a car person at all. That factor alone helps keep my car costs way down, but I wanted to know: how much does it really cost to own a used car for a year?
Luckily, I’ve got the numbers to provide an accurate answer to that question. So here we go.
The First Step: Tracking My Spending
On a whim last year (and ok, in an attempt to come up with things to write about on the blog) I started tracking my spending as part of a monthly challenge. I kicked things off in September 2015 with a really simple spreadsheet to track my spending, my income, and my savings. It also served as a really great way to see how far I was from hitting my 50% savings goal in real life.
As of this September 1st, 2016, I’ve officially got spreadsheets detailing my spending on everything for an entire year, since I kept the challenge going well past that first month. So I did what any personal finance nerd would do, and tallied up my spending on different things to share with you.
Hopefully, this series will give you useful information about how much it really costs to do things like own a used car or have a dog for an entire year – instead of just best-guesses and feelings.
If I’ve learned anything, it’s that what I feel like I spent and what I actually spent are two very different numbers.
A Quick Overview of My Minimum Viable Car
I’ve written about my car, affectionately dubbed Little Car, before, but here’s the basics you need to know to put my car expenses in context.
- Little Car is a 2010 Toyota Yaris that’s closing in on 100,000KM.
- I bought Little Car in 2014, and paid in cash.
- My only requirements of a car were that it gets me from point A to point B, and has air conditioning.
On a month to month basis, I feel like my car expenses are fairly low, thanks in large part to the fact that I don’t have a car payment every month. True story, that decision was less a savvy financial move and more based on the fact that I literally could not have afforded to pay for insurance AND a car payment every month. Wasn’t going to happen, so a cash purchase it was.
But the key point in all of that? My view of my car expenses was, until now, entirely based on feelings.
What Did I Actually Spend?
That’s the thing when you track your spending. You might feel like you don’t spend $200 a month on coffee, but surprise! You do. Or you might feel like you spend $100 a month on your dog, but a more accurate number is around $400, all things considered.
So sure, in the past few months I’ve looked at my car spending and patted myself on the back about how entirely reasonable it is. But that’s not the whole picture.
Over the past year, it has cost me no less than $3067.37 to own, maintain and drive my used car.
Oh Little Car, I had no idea how luxurious you really were.
How Did I Spend That Much?!
There are a few big chunks of money that can be easily accounted for – and a few big sources of savings that I need to mention that skew the number as well.
Costs
Insurance
As I’ve written about a few times, my car insurance used to be stupidly high, because I had no idea how to actually buy car insurance. How high is stupidly high? Let’s put it this way: I was paying the same amount as the single, 20-year old male co-op student in my department.
Since I’m not actually a single male in his early 20s, that seemed high to me. However, I didn’t do anything until more than halfway through the year, so my precious, precious lower rates only kicked in a few months ago.
Adulting Fails
This one time, I got a $458.00 ticket for not renewing my license plate sticker, which – I kid you not – was not a thing I knew I had to do. Where do they teach you these things?! I clearly missed the Adulting 101 class about car ownership.
Anyways, that accounted for a big, massive, disproportionate part of my car expenses this year. An expensive lesson, but trust me: it’s one I will only learn once.
License Plate Renewal(s)
After my horrifyingly large ticket, I promptly paid $108 to renew my license plate, but that fee, which usually covers a year, only took me from November to January, at which point I was back on track to renew my plates again.
Since I never want to drop another $400 on a useless expense, I paid the (second) $108 fee gladly. This year, I’m looking forward to getting a two-year renewal and giving myself two years of not-worrying-about-this-at-all bliss as a birthday present.
Rustproofing
I plan to drive Little Car for as long as I feasibly can, and part of that is making sure parts don’t start falling off the car as I drive to Costco. Rustproofing is part of that own-the-car-long-term strategy, so I gladly invest in it every year.
Savings
Gas
My annual gas bill, ringing in at just under $700, is cheap af. I know, because I often fill up my tank right behind one of the suburban-standard-issue SUVs in my neighbourhood, and the grand total they pay for a tank of gas makes me want to literally weep.
I’m incredibly lucky that right now, my family consists of The Boyfriend and The Dog, both of whom fit quite comfortably into Little Car, so I don’t need anything bigger. I also have a dreamy commute, so one tank of gas usually lasts me a few weeks. Both of those things add up to a happy, happy gas budget full of savings.
Maintenance
I can take literally zero credit for savings in this area, but I do need to acknowledge that I am the unbelievably lucky recipient of free routine maintenance and tire changes from The Boyfriend and his dad. His dad, no joke, builds cars for fun, so I couldn’t even pay for that level of experience if I wanted to. (Confidential to The Boyfriend’s dad: you are the best ever, and thank you again.)
So there you have it: even with the savings on gas, and maintenance, and the incredible luxury of not having a car payment, it cost me $3067.37 over the past year to own my used car.
Honestly, given the amount of convenience my car provides, and how much time it saves me every day on my commute, I think that’s a reasonable amount to have spent on it, even if I’m not a “car person.” It’s probably also slightly more than I’ll end up spending this year, barring any other fun adulting surprises or major maintenance expenses.
Which, I mean, now I’ve entirely jinxed it.
So stay tuned.
Do you know how much you spent on your car last year? Or how much you spend on gas? Let me know in the comments – my example is just one data point, and hearing from other people in different situations would be so helpful!
PS. Next up is everyone’s favourite topic with the best selection of photos: how much it cost me to have The Dog for an entire year. Come back next Wednesday to get all the gory details!
Beings we are taking a year long sabbatical, we started tracking all our spending as well. Now I have all these great graphs, charts and numbers to geek out over. So it took me about 60 seconds to find these numbers. =)
This is for 3 cars and a motorcycle to date in 2016
Maintenance: (all 4 are older) $1789
Gas: $638
Insurance: Liability for 2 cars (503) full coverage on 1 car ($144)
Grand total: $3074
Beings how much we have to haul the 5 kids around and the joy that the extra car and motorcycle bring Mr. Mt, it’s a good value. Plus that is the insurance for the whole year, so our cost for the rest of 2016 might only go up a few hundred dollars. And we have permanent plates on all of them, so we never have to pay to register our cars again. (love that!)
Permanent plates?! Canada needs to get on that, stat. I feel like it would reward people for keeping their cars for a longer amount of time, even if in a way small way 😉 Thank you so much for adding this perspective and sharing your numbers! I’m super impressed at how low your insurance is, by the way. Mine, even with the adjustment, is still over $100 a month, haha.
You can only do it for cars over 10 years old (another cool benefit of having an older car!) You pay 2 years worth of registration cost, and you are done. It really helps out folks who drive and keep older cars. And it does reward those who can’t afford to buy a new car every 4 years.
Omg don’t even get me started on the buying new cars every four years (ahem or two years) thing. Especially when it rolls additional debt into the new car purchase, because they’re underwater on their car loan.
I CANNOT.
I calculated mine, and I’m almost double: $5389.02.
Part of that is because I drive a 2007 BMW 525i, but mostly because I am an Uber driver. I have driven over 20,000 miles in the past year, and I work from home for my day job, so I have 0 commute. Lots of car washes, lots of fuel ($1856.31!!!) And almost $2000 in parts/repairs.
Thankfully I’ve been able to earn about $8000 from Ubering in the past 12 months, but the wear and tear, and depreciation of my car eat into that quite a bit!
Fancy car! (I think? Not a car person.) How do you like Uber overall? I bet you must have some funny stories from it, haha.
Good on you for looking at those numbers! I’m a little nervous to look at mine since I’ve had to do a lot of big repairs in the last year like replace summer tires, change all my fluids, do a power steering flush, get my shock absorber and windshield replaced. I’m super lucky I work part time at a dealership so labour and parts are half the normal cost. All I need is a set of winter tire and I should be done with the big car expenses for a while (fingers crossed). I also upgraded my license because I thought you HAD to eventually, so that was $180 I could have saved for my tire fund. My next issue will be insurance renewal which I will be looking into for a cheaper rate.
That really sucks about the license plate stickers! In Alberta they used to send out a notice reminding you to renew your registration but this year they stopped with very little warning – just a barely played ad on the radio. I know a few people who have gotten nabbed for that issue.
I’m excited and nervous to see how much your pup has cost you! I’ve been really debating getting a puppy but I know it isn’t cheap, these numbers might put off my decision for a little while, hah.
That is awesome Devon – I love part time jobs with benefits! (To be clear: I mean the awesome part is the discounts, not the laundry list of car repairs!) I worked part time at clothing stores during school, which is way less practical, but the discounts were just as appreciated, haha. As for the insurance renewal, I was so surprised at how much I could save just by switching – and how little my current provider was willing to budge on my rates even when I threatened to move!
And yay dogs! They are STUPID expensive. I used to resent the hell out of everyone who used to tell me that they were a “big responsibility,” because from a time and effort and lifestyle perspective I was well aware what I was getting myself into, but every single person who told me how expensive they were got a big hug when I realized how true it really was, haha. Puppies are especially bad, with all the first year vetting (and the purchase price if you get a purebred) but even adopting an adult dog comes with some set up costs. I’ll stop myself now so I don’t ruin the post for next week!
I drive a 2011 subcompact (similar to you though I am the only owner of mine and it has many fewer miles on it) and I’ve spent $2600 on it so far this year: $980 on insurance, $189 on maintenance (oil change, windshield wipers, and the thing that needed to be replaced at its last checkup), $416 on gas, $21 on parking, $208 to renew my registration, and $750 on commuting specific costs. I’ll probably spend another $570 this year on the car, mostly on commuting, for a grand total of about $3,000. It’s not that expensive for the use that I get out of it!
I agree on it actually not being that expensive for the amount of time and hassle it saves me! Plus literally everyone I know has a Fancy New Car and while they’re nice to sit in when my friends drive, I know my car costs are a fraction of theirs lol.
Also, SO curious: how do you delineate commuting costs from “other” car costs? Do you separate commuting gas out, or is that just parking passes, etc?
My dad owns an auto repair and has been solving my car woes for almost 15 years. He’s selling and retiring this year. I am at a loss. Fortunately for our budget, we do insist on paying for the work he does, but I know he doesn’t charge us what a regular repair shop would. Kudos to you for being so frugal with your car. Love that you are able to reflect on all of this for tracking your spending so carefully!
Thanks Penny! And that is so sweet that you guys pay him for his work, market rate or not. I love that and insist on paying friends and family when it’s their professional line of work, because I know how frustrating it can be to always be the source of free insert-expertise-here.
I’ve spent so much needless extra money on my car, it’s not even funny. I actually have a spreadsheet on my computer at home that shows the date and expense of every repair. There’s been a ton of warranty covered repairs too, which is surprising for a Honda.
I had a careless low velocity collision in a parking lot which was more than my $1000 deductible last year. Surprisingly it didn’t effect my insurance too bad. I lost the “no accident in five years” discount, but I’m still only paying like $583.57 for a six month policy on my 2011 Civic with some pretty steep liability limits.
Win for American insurance policies: I pay almost $700 for a six-month coverage period, with a $1000 deductible, with no accidents on my record. Sigh.
I deliberately moved to a neighbourhood with great public transit access (yay C-trains!), bicycle infrastructure, and walkability. Oh, and married a man who doesn’t drive. My transportation expenses include the ocassional bus ticket or Car2Go and bike maintenance. Last year was big with the purchase of two new (to me) bikes AND winter tires. I have friends who gave up their car and used what they would have spent on it to fund a European vacation.
I know this is not for everyone, but I think we often forget to ask the question of how much car we actually need before we get into figuring out how much car we can afford.
Still working on the spending tracking thing.. I’ll have to come back to this in a year with numbers to help make my case 🙂 Thanks for sharing your findings. Looking forward to some of the other upcoming wrap-ups.
Thanks Becca! And I am *all* about minimizing my reliance on a car so I love your take on it. I lived car-free for the first two years out of university and was so particular about the bus routes I had to be close to, haha. Never got into biking, because I was living pretty centrally, and am a big chicken, but the bus and my feet served me very well for those years!
My strategy now is mostly based on the incredibly lucky fact that my boyfriend and I both work in the same office park out in the suburbs, so I think when we move we’re going to go all in and buy a place right near work, so that for most of the year biking can be our commute (the quiet suburban streets, I can probably handle!)
Our current car is a 2011 – bought with a loan when our old beater became super unsafe and super unreliable, now paid off. (That story is here: http://nzmuse.com/2015/11/car-loan-2/) First time I borrowed for a car and I wish I’d done it earlier. Our old cars we bought in cash never lasted very long and caused us all sorts of stress – this one is cheap to register, cheap to insure and stress free, has never left us stranded. Registration is $80, insurance I think about $600, I didn’t track maintenance last year but we usually go through all the tyres every year (so that’s close to a grand) plus general costs of oil and filters and whatever else is involved in servicing. Petrol is crazy expensive in NZ and we probably spend a couple hundred a month.
I think my next car (/our next car) is going to be my first experience with a car loan, because now that I’ve finally gotten my act together and started investing, I see no reason to pull $10K out of my investments and use it on a car, especially when I’m rocking a solid credit score and can likely get a very low interest rate on the money. So I totally see your logic on that one!
Also omg RIP your petrol budget, I can’t even imagine how expensive it must be. We’re super lucky that prices are never tooooo bad here in Canada.
Every year when I get my registration fees, I’m reminded of why I drive a car that’s 10 years old. Those alone save me a $100-$200 per year.
Yassssssss old cars for the win. My boyfriend has lived through the car payment thing on his current car, and he keeps reminding me that *not* having one is the best feeling ever. We’ll probably have one again in the future, but for now, we’re perfectly happy with our vehicles. (Also omg how spoiled do we sound that we have TWO functional cars?!)
The actual cost of owning an used car per year is less as compared to owning a new car. But the ownership cost is not same in all cases. It means the cost will be decided on the basis of total miles, number of years, running condition, etc. Here, in this regard after going through your blog I got some important knowledge regarding different factors that would a major role in deciding the net cost. Apart form this, I mostly like the rustproofing point very much, as it was an unique concept for me. So, on a overall basis I want to suggest every one that instead loaning a new car, it is far better to own an used car within your budget. I would like to say thank you for sharing this.