Buyers Guide: Vehicle ownership costs
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Owning a car involves more than just the purchase price
Owning a vehicle involves a lot more than people might think, both in expenses and responsibility.
Are you lifting the couch cushions to find rogue coins to buy enough fuel for the car to get you through another week?
What happens if your ride breaks down?
When calculating vehicle costs, two factors make up the total -- fixed and flexible.
We've used a small petrol and diesel car as an example to provide a rough guide of what vehicle ownership costs can accumulate to.
Fixed costs are those that don't change with vehicle use. You still pay even while your vehicle is parked in the garage. Common fixed costs include expenses such as vehicle insurance, warrant of fitness and vehicle licensing.
They can also include factors such as vehicle depreciation and interest accrued if under finance. With a small car, you could end up having a fixed yearly cost of $4500 which equates to $12.30 per day.
Of course, this is just an estimate and it will vary according to how old the vehicle is, how long you have owned it, and the purchase price.
Vehicle depreciation is the largest contributing factor to a new vehicle's running cost. A new vehicle purchased four years ago for $26,600, may have depreciated by 50 per cent. That money lost (outlay) could have been invested and gained interest, which is also reflected in the calculation of the fixed running cost.
Though used cars may still lose their value over time, the percentage difference will be significantly lower.
Flexible running costs reflect all the consumables. Fuel, tyres, repairs and maintenance -- spending on these all add up.
If a small car is being driven about 14,000km a year, your fuel bill will be about $2400, and it could be more if the price of fuel goes up.
Tyres will cost about $266 each year if they last three years, and repairs and maintenance will be about $550.
If you combine the fixed and flexible costs, it would give a combined total of around $21 per day. This is all just for a smaller vehicle and these costs will increase for bigger cars.
Other factors that may have an impact are driver licence renewal, extended warranties, breakdown services, diesel road user charges, and even parking costs.
When the budget is tight, the cost of some items can be reduced by shopping around to find the best deals on repairs and maintenance. But never scrimp when it comes to safety items and insurance.