There are more costs to owning a car after simply buying it. There are hidden costs of owning a vehicle that a lot of people do not factor in. Whether you are a business that owns a fleet of vehicles, or you have a used car sitting in the driveway, you need to know about the hidden costs of owning a vehicle.
Taxes, Tags, Insurance
Before you ever sit in your vehicle there is some business you need to take care of. You will need to pay taxes on the vehicle, secure insurance, register your vehicle and pay for license tags at your local DMV office. First, you need to secure your insurance.
Auto insurance is a large industry. There are many different auto insurance carriers to choose from. The cost of a policy will largely depend on the type of vehicle you are insuring, your driving record, and what type of coverage you want. In some cases, like when your vehicle is financed, you may not have a choice in which type of coverage you get. Most financial institutions will require that you get full insurance coverage. Full coverage insurance includes coverage for collision, theft, and more.
The cost of the taxes, the registration, and your insurance are all influenced by how valuable your car is. What you plan on doing with the car will also play a role in how much insurance you will pay. For example, if you are in business for yourself that requires you to deliver goods, this will drive up the cost of insurance. This hidden cost can range anywhere from $500-$10,000 a year.
Every vehicle needs maintenance. A regular maintenance schedule is essential to extending the life of your vehicle and ensuring you avoid breakdowns. After all, 1/3 of drivers will have their car breakdown at least once every year. Maintenance costs will vary greatly depending on the type of car you own. For example, a tune-up on a Cadillac will be much more expensive than a tune-up on a Kia.
Some vehicles require oil changes every 3,000 miles while others require oil changes every 5,000 miles. You must follow the manufacturer’s recommendations. The more high-tech your vehicle is the more the maintenance will cost.
Another thing that affects the cost of maintenance on your vehicle is your driving habits. Let’s say you drive for one of the delivery business services and you drive in harsh conditions like high temperatures or very cold temperatures, then you will need maintenance more often. If you use synthetic oil instead of standard oil, you can expect to pay more for an oil change.
There are parts that you will need to regularly replace, like tires, windshield wipers, and brake pads. All these costs add up. You can expect to pay between $250-$1500 each year for this type of maintenance on your vehicle.
One of the hidden costs of driving is the potential for a driving ticket. For example, in New York, if you are caught using a phone while you drive, you will have to pay $200 in penalties, and you will have five points attached to your license, according to the NYS DMV. Points on your license will drive up the cost of your insurance.
The business of driving can get expensive when you do not follow the rules. Making a mistake on the road can cost you plenty. Making a mistake that causes an accident can be very expensive. According to the NYS Department of Transportation, at the low end of the accident spectrum, an accident can cost about $15,000; on the high end, it can cost about $63,000. Most accidents cost about $30K-$40K.
The cost of driving is not quite as clear-cut as it seems. There are a lot of hidden costs that you wind up paying to own and drive a vehicle whether you are a business owner or not. Driving can get expensive. You should know the real cost of driving a car before you actually buy one.