The Cost Calculator
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How to Reduce Ownership Costs
- Depreciation is the biggest expense for most vehicles. If you buy a vehicle that has depreciated to 50-75% of its initial price you can save thousands. For most makes and models this means looking for a 4-7 year old car.
- Avoid vehicle churn. Sales tax is a transaction cost that's incurred every time you acquire a new vehicle. If you buy depreciated vehicles and own them for many years, you can minimize the sales tax you'll pay over a yearly basis.
- Interest is the enemy! Whenever possible pay cash for your vehicles. If you must finance, paying the principle down ahead of schedule can save you hundreds.
- Get a reliable vehicle. Do some research on the model you've picked before you buy. Do people online commonly mention issues? Have any recalls been issued? What are the reliability ratings? For used cars you should consider getting them inspected by an independent mechanic before buying. A quick inspection can save you thousands in the long run.
- Pay attention to fuel economy! Gas may be relatively cheap now, but the cost of fuel over a car's lifetime can be significant! To save money on fuel, look for fuel efficient cars (30+mpg) that can take regular gas or diesel. Cars that require premium fuel will likely cost several thousand dollars more over their lifetime. Also, check out fuelly.com to see what type of fuel economy real people are getting. This can sometimes be a bit different than what is advertised.
- Learn to do your regular maintenance. Oil changes, air filters, spark plugs, light bulbs, and brakes are all reasonable jobs for most home mechanics. Youtube is a great resource for the home mechanic, and can help give you the confidence to tackle even more challenging jobs.
- Never Buy A New Car!
- CNBC - "Buying a new car is the single worst financial decision"