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When you’re thinking about buying a car, it’s easy to focus on the sticker price. But the real cost of owning a car includes much more than your monthly car loan payment (if you have one).

Before you buy, make sure you also have a realistic idea of how much you might pay for things like car insurance, fuel, vehicle inspections, and maintenance and repairs. If you need help covering these costs, you could look into a personal loan.

Car shopping can be both exciting and a little nerve-wracking, regardless of whether you’re thinking of buying new or used. Even if you’ve come to terms with such a large purchase, don’t forget that the costs don’t end with the sticker price. There are a lot of smaller expenses that can add significantly to the cost of owning a car, and they should factor into your decision.

These expenses could include interest on a car loan, car insurance, regular maintenance, fuel, taxes, registration, and more. Once you have a realistic estimate of the monthly and annual outlay involved, you can compare it against your budget and determine your next steps.

So, before you head to the dealership, be sure to consider all these costs that come with owning a car.

Your monthly car payment

Some people can live out the dream of buying a car with cash, but this isn’t a reality for most. Instead, you might have to rely on financing to make your purchase.

Unless you’re able to secure a zero-percent loan (these do exist), you’ll find yourself making monthly loan payments that include interest—the amount of which will be partly determined by your credit score. Your monthly payments will also include the repayment of principal, which will change depending on the length of your loan.

The overall amount of your monthly payment will vary depending on the size of your down payment, which is required by some lenders. In general, a larger down payment means a smaller loan amount and lower monthly payments. But the size of your monthly payment is also affected by the length of the loan. The longer the term, the smaller the monthly payment.

Curious about how much you might have to pay? If you already have your eye on a car, NerdWallet has an easy-to-use car payment calculator. Just plug in the car price, down payment, interest rate, and term, and the calculator will show you the monthly payment, total interest you will pay, and the total cost of the car over the lifetime of the loan.

Car insurance

The cost of car insurance varies greatly depending on many factors, including where you live. Each state sets its own insurance requirements and oversees the price that companies will charge. In addition, the cost of insurance will also be affected by your driving history, age, and potentially many other factors.

To find out what you might pay, you can contact an insurance agent and tell them which car you’re considering, or search online at various sites to calculate insurance premiums.

Tip: NerdWallet has a handy table that shows minimum car insurance requirements by state.

There are many ways to save on the cost of car insurance, such as lowering the amount of your coverage, increasing your deductible, or taking advantage of discounts (such as good driver and multipolicy). Don’t hesitate to have a conversation with your insurance provider to make sure you get the best deal for your situation.

Fuel costs

Despite the rising popularity of electric vehicles, the cost of gas is still likely a primary factor in your monthly expenses. Depending on how much you drive and where you live, it’s not unreasonable to think you might spend hundreds of dollars per month on fuel alone.

(You can use the U.S. Energy Information Administration website to see national and regional average gas prices.)

It’s important to consider this expense when buying a car, as fuel efficiency varies by model. If this is a determining factor for you, here’s a list of the most fuel-efficient vehicles.

Fueleconomy.gov also lets you look up the miles per gallon for a specific make and model, or find cars that get a specified minimum number of miles per gallon.

Maintenance and repairs

Of course, everyone hopes that nothing goes wrong with their vehicle. But we all end up at the garage now and then.

Even if your car doesn’t need big repairs, you’ll still have to pay for basic upkeep. That could include a new car battery, tires, brakes, regular oil changes, and state inspections. These costs vary based on your vehicle, where you get it serviced and how often, and if a repair is covered by warranty or insurance.

If you find yourself facing a critical auto repair such as a catalytic converter or water pump replacement, you don’t want to wait. The first thing to do is check if it’s covered by an active warranty (either standard or extended), or by your insurance. Then, do your research and ask your network about a reputable auto mechanic, one you can trust to give you a fair deal and a good repair.

Chart showing a hypothetical example of the cost of car ownership
Figure 1. Hypothetical example showing the monthly cost of owning a car as of 2021

Don’t forget depreciation

Although it’s not an out-of-pocket expense, one of the biggest eventual costs of buying a car is depreciation—or the fact that it will lose value over time.

Fortunately, there are a couple of things you can do to mitigate the effect of depreciation:

  • Buy a used car, since much of the depreciation occurs when it leaves the showroom the first time.
  • Buy a car that holds its value better than the competition.

The first point is self-explanatory, but the second one will take some research. Every year, Kelley Blue Book shares its “Best Resale Value Awards” list. You can search by brand, overall top 10 winners, and category winners to find out which cars are more likely to have high trade-in or resale value.

Researching which cars are most reliable can also be helpful. The less time your car spends at the mechanic, the better. Consumer Reports keeps an up-to-date Guide to Car Reliability that can help identify cars with a record of good long-term performance.

So, what is the true cost of owning a car?

The answer: it depends. In addition to your purchase (or lease) price, budgeting wisely for your new vehicle requires that you consider lots of factors, including fuel costs, loan payments, maintenance, and vehicle registration fees.

That’s why it can be helpful to make a list of all the potential expenses. Customize your list based on the vehicles you’re considering, so you can assess whether the car you want fits your budget.

After that, you might decide public transportation or other options are more affordable and better suited for your situation. Many cities are bike friendly, and of course walking is good for your wallet, the environment, and your health.

Depending on your decision, and if you need help covering your costs, you can always consider applying for a personal loan. Discover Personal Loans offers loans in amounts from $2,500 to $40,000, and the money can be sent by the next business day if you’re approved for and accept the loan. While Discover doesn’t offer auto loans, funds from a Discover personal loan can be used for car-related expenses and emergency repairs.

Once you have a handle on what you need in order to cover these additional expenses, start here to see if you qualify.Check Your Rate