Driving up debt: the true cost of owning a car


When you buy a car, you tend to think of all the benefits that come with your shiny new purchase. You now have the freedom to drive anywhere, anytime, listening to whatever you want, as loud as you want.

What often gets overlooked is the financial burden of car ownership. There’s the cost of buying a car – the price you pay at the dealership. And there’s the cost of buying a car – what it actually costs you to drive the car you own.

The expenses - gas, repairs, car payments and insurance – can pile up so high that, suddenly, “the freedom” of owning a car doesn’t feel so free. 

How much money are we talking about, exactly? That’s what the author of this Motley Fool article wanted to find out as he tracked every single car-related expense over three years. Max Chatsko not only clocked every kilometre he drove in his new Mazda 3 hatchback, but he also recorded every tank of gas, oil change and repair to get a data-driven analysis of the real-life cost of car ownership.

So is buying a car worth it?

Fuel costs leave you empty.

Chatsko’s findings on fuel economy of his car are surprising but probably should be obvious. How far you can drive on one tank of gas depends on where you are driving. The miles per gallon estimates provided by governing agencies like the EPA (U.S. Environmental Protection Agency) differed wildly from his results. EPA estimated an average of 32 MPG for his vehicle, his fuel economy was actually more in the 26.6 MPG range.

This can be attributed to Pittsburgh, Chatsko’s hilly hometown. Inclines can make a difference in how many times you have to fill up. If you live in a city like Vancouver, where commuting from downtown to anywhere on the North Shore, including North Vancouver and West Van, you are essentially driving up a mountain. So expect your fuel economy to take a substantial hit.

Natural Resources Canada offers a fuel consumption ratings tool (in litres) for vehicles made from 1995 up to 2006, as well as a list of the most fuel efficient vehicles on the market.

Chatsko also tracked the impact of his local fuel rewards program and it amounted to a paltry 5% of his gas expenses. That’s not exactly easing any pains at the gas pump.

Ownership expenses can push six figures over the lifetime of your vehicle.

While Chatsko spent an average of $10,000 per year on the first four years of car ownership, his data revealed that he would have to drive for nearly 15 more years and 150,000 total miles before his average yearly costs would drop by half. At that point, he would be nearly $80,000 invested in owning a car.

For perspective, he bought the car brand new for $25,300, which means $55,700 went into ancillary costs, even without factoring in expensive visits to the mechanic. Your average bus pass costs around $1,000 per year for even more perspective.

Stuck in neutral when it comes to car ownership?

Under the cold hard lights of data analysis, car ownership doesn’t look to be the most financially sound enterprise.

But our financial decisions in life are not always based purely on numbers. Cars still provide freedom and convenience compared to public transit and ride-sharing.

There is definitely value to automobile ownership, but the inescapable question is at what cost? As Chatsko points out, families with young children might rely more on a car for transportation than a single man in his 20s. But the 20-something might put more value on getting the behind the wheel for a road trip.

No matter where you go in your new car, if you decide it's worth it, just don’t forget your wallet.

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