Depending on what you do for a living and where you live, a car can be an essential of day to day life. One thing to consider when purchasing a vehicle is the additional costs that come with it. When planning out your finances, it would be wise to include this in the plan. So, how much should you budget for auto maintenance and these additional expenses?
You won’t be able to legally drive without insurance coverage. So, there is no getting out of this one. You can expect to pay, on average, anywhere from $100 to $200 per month. There are plans, though, where you can pay as low as $60-80 per month for your monthly rate, particularly with single insurance plans. Your vehicle type, insurance company, driving history and the like all determine this cost. Not to mention, the more vehicles you have on one insurance, the more you will end up paying.
Companies like Progressive will actually provide discounts with a great track record and loyalty to their company. To see what type of discounts you may have with your current policy, don’t be afraid to ask. You might be pleasantly surprised at what you’ll hear.
Taxes and Fees
If you’re purchasing your vehicle new, you will need to buy a title, which can cost anywhere from as low as $4 to around $100 or more, depending on which state you live in. Additionally, you’ll also have to pay for registration fees annually or every two years, also depending on where you live.
Taxes will need to be paid on new or used vehicles coming under your name as well. For example, if you buy a car for $25,000, you will pay roughly $1,500 total in taxes, which can be broken down to $125 per month. However you would want to incorporate this in to your budget plan is entirely up to you. (Monthly or annually, that is.) To learn more about the additional fees when you pay for a motor vehicle, visit the DMV website.
Costs will vary for different cars, but budgeting for your standard auto maintenance should not be too difficult. Regular check-up expenses may include tire rotations, fluid checks, transmission fluids and more. The oil change will be needed every 5,ooo to 10,000 miles. The charge for an oil change could be anywhere from $35 to $60, also depending on the garage doing it. The more you drive, the more your car needs regularly maintained. This is also true if you have an older model.
The average amount of miles an individual drives in a year is roughly 12,000, give or take. Therefore, it’d be safe to budget out at least $50 for oil changes alone.
Additionally, it is recommended to have your tires rotated every six months or around 6,000 miles. You should expect to pay roughly $30 per tire rotation.
As far as flushing your brake fluid, a charge of roughly $90, and a transmission flush, a $200 average cost, these will not need to be done regularly but should be allotted into your “emergency fund” budget for your car.
Gas expenses for your car can add up quickly, which justifies having a fuel-efficient vehicle. You could easily spend $1,000 annually on gas alone; even more for those of you who drive even farther. The good news is that gas prices are currently averaging $2.22 in the United States, according to AAA.
To break this down monthly, let’s say you drive 23.5 miles to work one way, and you work five days per week. If your car gets 23 miles to the gallon and the average cost of fuel is $2.22, you’ll be paying roughly $91 each month for gas. This definitely needs to be a line item on your list when budgeting out for your car.
If you want to calculate your own commute costs, you can use this calculator from EZCommute.net.
Other Things to Keep in Mind
A portion of your emergency fund needs to go toward car expenses that may arise. While you won’t be able to fully determine exact costs you will need to put aside monthly toward your auto maintenance, you’ll want to be ready for any surprises. You also don’t want to struggle to pay for these fees considering how detrimental a car typically is to your career. To see how much you should put aside for your car for those unpredictable moments, keep in mind its cost and value. For a $12,000 automobile, $600 would be a good starting point to have on the side. The higher price tag of the vehicle, the higher the savings should be, more so if it is thought to be high-end.
Another route you could take to put aside money for your car if it is older would be to save the amount of your insurance deductible plus $1,000 for a costly fix.
To wrap up, you should budget out $275 per month toward your auto maintenance based on the numbers above. This will keep you and your car prepared for the worst (and best). For your auto maintenance budget, you should keep these numbers in mind using the numbers above:
- Car Insurance: $100 monthly
- Title: $51 (will depend on your state)
- Registration Fee: $36 annually
- Taxes: $125 monthly
- Oil Changes: $50 annually
- Tire Rotation: $60 annually
- Gas: $91 monthly
- Miscellaneous Maintenance (Fluids): $290
- Estimated Maintenance Costs: $803
- Estimated Monthly Costs: $328.20*
*Not including car payments. Annual fees broken down into monthly to allow for budgeting purposes.
This should give you an idea of how much you should include in your budget each month for auto maintenance. For an older car, you will pay less on the overall loan but more in upkeep. So, you may want to include more in an emergency fund for those costly repairs. Keep in mind, this monthly amount does not include the emergency savings amount.
If you aren’t shopping around for a new car but still do not have money set aside for your vehicle, you should start doing so today.
Do you currently budget out funds for your auto maintenance?