'What is Cost of Ownership?' Asks One Third of US Drivers While Borrowing to Pay Repairs
According to the American Automobile Association, one third of drivers in the U.S. cannot pay for an unforeseen vehicle repair without going into debt.
AAA says the average trip to the shop will set you back between $500 and $600. So, what does that mean for the 64 million American drivers who can’t afford an unexpected repair bill?
Make sure to factor in all of the costs associated with the vehicle, not just purchase price or monthly payments.
Consumer Reports covers six points to help make a smart buying decision: depreciation, fuel costs, interest, insurance, maintenance, and tax. While maintenance is next to last on that list in terms of actual dollars spent (only 4 percent of total ownership cost over five years), the real danger is a lack of preparation.
Depreciation isn’t an immediate cost, so it’s easy to disregard. Fuel costs are perpetual and planned. Insurance is agreed upon beforehand and can easily be lumped together with the actual payment. Insurance, though it can be pricey, is at least consistent.
The surprise factor inherent to repair costs is what makes it seem like the straw that broke the camel’s back.
According to another study by AAA, $792 per year is the average amount spent on a vehicles maintenance. Some people either choose not to perform regular maintenance, or forget all together, which only raises the price for repairs when something does go wrong.
Since the reason these relatively small figures bring so much misery on auto owners is being unprepared, AAA suggests that saving at least $50 per month will help to cover the cost of regular maintenance and unplanned repairs.
So the next time you buy a car, make sure you can afford all of the costs, not just the payment.