EYE ON AUTOS: How Much Will That New Car Really Cost You?
There's a lot more to the cost of your car than the monthly payment and insurance. Before you buy, be aware of the costs that lie ahead.
By Martin Davis
EDITOR-IN-CHIEF
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Like everything else over the past few years, the cost of cars has soared. In 2019, just prior to the pandemic, the average cost to purchase a new car was almost $37,000. In January 2025, the average new-car cost was more than $49,700.
That price means higher average monthly payments — $737 in the third quarter of 2024.
These eye-popping numbers are what most buyers focus on, but it’s far from the total number of dollars drivers will shell out per month to own a car.
So before you sign any papers and drive off a lot based on the price you negotiate with the dealer, spend some time exploring the other costs associated with owning a vehicle.
Some are obvious — fuel, insurance, and maintenance costs, for instance. Others won’t surprise people, but the costs tend to not be an issue the first couple of years one owns a car — repair costs, for example. And some costs are things that people don’t think about until they sell the car — depreciation.
Understanding the Full Cost of Car Ownership
Before buying, it pays to do some quick math to see if you can really afford that dream car you want to buy.
Some of the costs are simple to determine.
Monthly Payment: There’s no need to hold your breath in that little room the salesperson takes buyers to when they’re finalizing the deal to find out what your monthly payment is going to be. Calculator.net has a tool that will do all the labor for you. Simply enter the price of the car, interest rate, loan term, any cash incentives and down payment, your trade-in value, how much (if anything) is owed on your trade-in, your state, the sales-tax rate, and title and registration fees, and you will know the number. Knowing before you walk into the dealership will help buyers not feel pressured into purchases they can’t afford.
Insurance Rate: A quick call to your current insurance carrier will typically yield an answer. However, there are also sites that will provide estimates without your having to provide personal information (like phone number or email address). NerdWallet is a good start. You’ll get an average number, but it gives you some sense of what to expect.
Others require a bit more digging.
Depreciation: This is one cost that many people pay very little attention to. Don’t make that mistake. CarEdge has a very good depreciation calculator that will give one a good sense of how well they can expect the value to hold, or fall. This can be an especially useful bit of information if you are deciding between multiple car models.
Maintenance: Consumer Reports offers an easy-to-follow breakdown of maintenance costs by vehicle brand.
Fuel Costs: This one is tricky because fuel costs are dynamic. The U.S. Department of Energy offers a fuel calculation tool that is easy to use and allows you to compare costs of different vehicles. When looking to buy a new car, it helps to run the calculations using a projected low and high gas price. Gas may average $3.15 a gallon today, but in a year it could soar to $5, or drop as low as $2. Oil is a commodity, and its price is affected daily by a wide range of factors. Be prepared in case there’s a sudden rise in prices.
Things Change
Doing this homework before walking onto the lot will take some of the anxiety out of making this purchase.
Keep in mind, however, that maintenance costs, like fuel costs, will fluctuate with the time of year, and the age of the vehicle.
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