Money Talks, So Should You

How to budget monthly for typical car costs

Clint Williams
by Clint Williams, Dimespring Contributor

Congratulations. You’re driving off the dealer lot with your nostrils filled with that new car smell. You used savvy shopping and hard-as-nails negotiating to drive down the sticker price and the monthly payment is more than manageable.

The monthly car payment isn’t the only hit to the monthly budget, however. There are other costs: taxes, fuel, oil changes, tires, insurance. And those costs tend to hit you just now and then — out of sight of the regular monthly spending and out of mind when it comes to preparing for them. Even a small sedan can end up costing you much more than you think.

Driving a small sedan — a Ford Focus, Honda Civic or Toyota Corolla — costs 45 cents a mile if you’re driving 15,000 miles a year, according to a cost of driving study released by AAA earlier this year. A brand new Ford Focus Titanium, the top-level trim, has a sticker price of $24,873, but a total five-year cost of nearly $46,000, according True Cost to Own calculator offered by

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So, what costs are they figuring in that you are leaving out?

Insurance: This can be a big chunk. The AAA cost estimate — based a full-coverage policy for a married 47-year-old male with a good driving record, living in a small city and commuting three to 10 miles daily to work — is $979 a year. Because many insurance companies bill you every six months, that means writing a big check twice a year. Do that math and stash 1/12th each month.

Maintenance: Even new cars need the oil changed and air filters replaced. The Edmunds calculation for the Ford Focus Titanium is $3,702 in maintenance costs over the first five years of ownership, with the amount rising each year. AAA estimates maintenance costs at just over 4 cents a mile -- about $622 a year if you’re driving 15,000 miles. So, you’re budget should include $75-$100 for this line item.

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Registration, fees, taxes: Many state and local governments collect tax on property such as automobiles. Then you have to pay a tag fee each year. This cost will slide as your car loses value. Edmonds pegs the five-year cost on the Ford Focus at $3,400 while AAA estimates the annual cost for a small sedan at $441 a year. Again, this is an annual bill, so set aside a bit each month in anticipation.

Clint Williams is an Arizona-based freelancer for DImespring. He has written for the Arizona Republic and the Atlanta Journal-Constitution.