{"id":1476,"date":"2024-09-28T20:12:30","date_gmt":"2024-09-28T12:12:30","guid":{"rendered":"https:\/\/moneystock.net\/wp_e\/?p=1476"},"modified":"2024-10-05T18:29:12","modified_gmt":"2024-10-05T10:29:12","slug":"the-total-cost-of-owning-a-car","status":"publish","type":"post","link":"https:\/\/moneystock.net\/wp_e\/2024\/09\/28\/the-total-cost-of-owning-a-car\/","title":{"rendered":"The total cost of owning a car"},"content":{"rendered":"
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<\/figcaption><\/figure>\n<\/header>\n
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General Advise<\/h3>\n

When I was buying the first car of my own, my seniors at the company gave me two main pieces of advice. 1. Buy a used car. This is because I’m still inexperienced in driving, so I could often scratch or ruin my car related to minor accidents. 2. The budget should be less than half of my annual income.<\/p>\n

No. 1 is pretty reasonable advice, but about No. 2 I don’t know what the basis is. Recently, I was watching YouTube and I was looking at a financial expert (?) recommended a reasonable vehicle price for each income. If you are mortgage free, it is suggested to use up to half of your total annual income, and if you are renting a house, you can get up to 3~4 months of your total annual income, and especially if you have a monthly income of less than $3,000, you should not buy a car. Use public transportation instead.<\/p>\n

Again, I don’t know what the rationale is, but considering that Car-poor have become a social problem and encourage people to buy unreasonably expensive German cars, it seems to be a good thing that there is such advice.<\/p>\n

 <\/p>\n

Total Cost of ownership<\/h3>\n

So, I did a simple calculation of how owning-a-car affects my personal finances on top of the price of the car.<\/p>\n

[Total cost of ownership for a $50,000 vehicle]<\/p>\n\n\n\n\n\n\n<\/colgroup>\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
<\/td>\npetrol<\/td>\nDiesel<\/td>\nPHEV<\/td>\nEV<\/td>\n<\/tr>\n
Vehicle price<\/td>\n$50,000<\/td>\n$53,000<\/td>\n$60,000<\/td>\n$70,000<\/td>\n<\/tr>\n
Depreciation \/ year<\/td>\n$3,333<\/td>\n$3,533<\/td>\n$4,000<\/td>\n$4,667<\/td>\n<\/tr>\n
Fuel Costs \/ year<\/td>\n$1,500<\/td>\n$1,305<\/td>\n$525<\/td>\n$300<\/td>\n<\/tr>\n
Registration fee \/ year<\/td>\n$900<\/td>\n$900<\/td>\n$900<\/td>\n$900<\/td>\n<\/tr>\n
insurance \/ year<\/td>\n$600<\/td>\n$600<\/td>\n$600<\/td>\n$600<\/td>\n<\/tr>\n
Maintenance \/ year<\/td>\n$350<\/td>\n$350<\/td>\n$350<\/td>\n$350<\/td>\n<\/tr>\n
Mortgage Interest \/ year<\/td>\n$2,500<\/td>\n$2,650<\/td>\n$3,000<\/td>\n$3,500<\/td>\n<\/tr>\n
<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
Running cost per year<\/td>\n$9,183<\/td>\n$9,338<\/td>\n$9,375<\/td>\n$10,317<\/td>\n<\/tr>\n
Running cost per month<\/td>\n$765<\/td>\n$778<\/td>\n$781<\/td>\n$860<\/td>\n<\/tr>\n
Monthly net expense (excluding depreciation)<\/td>\n$488<\/td>\n$484<\/td>\n$448<\/td>\n$471<\/td>\n<\/tr>\n
10-Year Total Cost<\/td>\n$91,833<\/td>\n$93,383<\/td>\n$93,750<\/td>\n$103,167<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

 <\/p>\n

After making the table, some things come to light that I didn’t realize before.<\/p>\n