Owning a car offers many benefits. You no longer need to depend on others to move from one area to another and you can give people a lift and define your social class. However, before buying a car, you should understand how much it will cost you to have one. Learning the cost of car ownership will help ensure that your budget accommodates the cars on your list. If you’re not careful, owning a vehicle can quickly drain your savings. Here are some of the unavoidable car expenses you should consider before signing the purchase agreement.

1. Fuel

Unless you are thinking of purchasing an electric vehicle, you will have to spend money on gas. Fuel prices are highly variable and can change from time to time or from one state to another. While it’s hard to predict how precisely fuel prices will fluctuate, the average U.S. cost of fuel has varied between $ 2.37 and $ 5.99 per gallon over the past five years. Larger vehicles, such as SUVs and pickup trucks, tend to cost more in terms of fuel, while smaller cars like sedans and sedans tend to be more affordable. However, how much you spend on fuel each year will largely depend on the distance per gallon you get with your vehicle, the price of fuel in your area, which can vary greatly, and the road conditions in your region.

2. Maintenance costs

Although the manufacturer’s warranty meets most of your maintenance requirements during the first few years of ownership, you will eventually have to pay for them.

3. Tires

Most people see tire bills as a maintenance cost. However, modifying them is a separate task and hence we have listed them as an expense. Specialists recommend changing tires every 3-6 years, but you should inspect them regularly to make sure the tread remains in top condition.

4. Insurance

Driving without insurance is prohibited in most states, even if you think you are an experienced driver. This implies that you have to include it in your car ownership expenses.

5. Loan / Financing

The monthly auto loan repayment is probably one of the most significant automotive expenses. While you can reduce your monthly payments by extending the loan term, doing so will increase your interest outflows. According to ConsumerReports.org, interest accounts for 11% of vehicle ownership costs over five years.

6. Registration fees

You have to register your car every year to legally drive. As your vehicle ages, your registration renewal costs go down. However, it can cost huge sums of money each year during the initial stages. Some states charge registration fees at a flat rate, while others use things like fuel efficiency or the age of your car to determine costs.

7. Car ownership tax

Some states charge a car ownership tax depending on the value of the vehicle.

8. Depreciation

Depreciation is not an expense you have to pay annually or monthly, but it does have a significant impact on the total cost of ownership of the car. It refers to the variance between what you have spent on buying your car and what you will get once you sell it after a certain period. The longer you spend, the more value your car will lose.

9. Parking

Depending on where you live and work, you can include parking fees in your budget. Parking rates vary from city to city.

10. State Sales Tax

If your state imposes a car sales tax, you will need to pay it once you purchase your vehicle. Sales tax varies depending on the state in which you register your vehicle. If you’re buying a car in a different state, the dealership may need to register the vehicle in your state and file sales tax with your state’s auto agency.