Vehicle Ownership - The City you live in can influence the Cost of Owning a Car

Vehicle Ownership - The City you live in can influence the Cost of Owning a Car

If you are planning to buy a vehicle, you may want to check into how much it could cost to own for five years. The best way to do that is to list the possible costs you will incur over five years for fuel, maintenance/repairs, taxes, fees, depreciation, interest and insurance. Even if you are offered a good deal on a new car, it's always a good idea to carefully consider all aspects of vehicle ownership before making a final decision.

Over five years the city you live in can make a big difference in the cost of owning a car. For instance, if you live in California, you perhaps would pay around $10,000 more for the same vehicle than if you reside in a state such as New Hampshire. For such situations, automotive research websites exist such as Edmunds.com that have a "True Cost-to-Own" formula that calculates the average cost of owning a car over a five year period. On a range of new and used vehicles the "True Cost-to-Own" formula is based on depreciation, financing, taxes, fees, insurance premiums, fuel costs, maintenance and repairs.

You can make use of this "True Cost-to-Own" formula to calculate the average five-year cost of owning a car. A brief review of the formula results in the following:

* The most expensive places to own a vehicle: Hawaii, California and Alaska

* The lowest average vehicle ownership costs: New Hampshire, South Dakota and South Carolina

Reasons why the rates of cars differ between various states:

Carmakers sometimes offer regional incentives

Intense competition results in bigger discounts from dealerships

Maintenance and repair costs: Current labor rate for service technicians in a state and sales tax on replacement parts

Sales tax and interest rates on car loan on "luxury" vehicles

Accordingly, you may wish to consider the following factors before purchasing an automobile:

* Some states (i.e. New Hampshire) do not have a state sales tax

* Other states (i.e. Alaska, Oregon, South Carolina, Delaware) have minimal state sales tax

* In Oregon, car buyers pay an average of just $130 in taxes and fees

* In Alabama, car buyers pay an average of $4,000 on top of the purchase price

* In Alaska, taxes and fees average approximately $503

* In Alaska, car owners pay an average of almost $12,000 over five years to insure their vehicles

* Owners in South Dakota pay less than $5,000 to insure their vehicles

* California has the highest average costs for maintenance and repairs

* New Jersey and New Hampshire have the least expensive maintenance and repair costs

* Over the course of five years, car owners in South Carolina pay $3,000 less than those in Hawaii to fill up their vehicles with gas

If you live in one of those high-cost-to-own states, you should seriously consider all costs before choosing a vehicle to purchase.

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