Buying and owning a new car for most people is an exciting experience. It can also be more than you might expect financially. After all, there's more to your vehicle's expenses than your monthly loan payment. You'll have to maintain the car from the moment you drive it off the dealer lot. By coming up with a car budget before you buy, you'll have no surprises at what your new car will really cost to own. Money management services and automotive publications have come up with general budgets based on compilations of several types of cars. But the truth is, your budget will be as unique as your car and driving habits.

Break It Down

Most of your car expenses can be considered either fixed or variable costs. Fixed are those expenses you must pay no matter how much or how little you drive the car. Variable costs increase with each mile you drive.

Fixed expenses include:

  • Down payment (one-time expense)
  • Loan payment
  • Insurance
  • License fees
  • Taxes
  • Miscellaneous (auto club, accessories, etc.)

Variable expenses include:

  • Gas
  • Oil
  • Tires
  • Maintenance
  • Repairs
  • Miscellaneous

Once you've determined the monthly outlay for these expenses, add them together to determine your overall monthly cost (based on your average monthly mileage for variable expenses. Here's a few guidelines you can use to calculate the variable costs for your car. For example:

  • Your gas expense can be figured by taking the average number of miles you drive each month and divide by the car's average fuel mileage. Multiply the result by the average fuel price for your gas expense.
  • Your engine oil (and filter!) should be changed about every 3000 miles. Based on the miles you put on your vehicle, you should be able to guess how often you'll be changing your oil. From there, a monthly expense should be easy to calculate.
  • Tires can last anywhere from 40,000 miles to 70,000+ miles if used under normal conditions. Research rotation and replacement costs, then determine your monthly expense based on your travel habits.
  • Maintenance intervals for your car can usually be found in your owner’s manual. The dealer's service department or your mechanic can give you an idea what various maintenance procedures will cost. Remember too that some maintenance and repair items may be covered under your new car warranty.
  • One variable that's hard to pin down is repair costs. Overall, cars are getting to be more reliable and trouble free but major repairs will be needed sooner or later, particularly on older used cars. To cover these potential costs, you may want to consider a 'slush fund' of cash for just such an emergency.

The numbers, combined with your fixed expenses, should give you a pretty good idea of what it will cost to operate your new car. After coming up with a budget for the car you want, you may decide it doesn't fit your overall budget and consider other cars that cost less to own. You may not be able to comfortably afford the exact car you want right now, but hey – it's better to find that out now...instead of later!