Car Costs

I was trying to figure out what it cost to own a car yesterday. I mean the whole cost, every penny, nothing hidden. I was making it up on my own until I discovered that the American Automobile Association has done it for me. In fact, I think they do it every year. This is what I found for 2008: http://news.aaa-calif.com/pr/aaa/document/Driving_Costs_2008.pdf

One of the websites said that car costs can be the second largest expense for a family after housing. And, given that most families own at least two cars, the costs can be substantial. We own both a car and a truck (1/2 ton pickup), neither of them particularly new or nice. But, owning them does seem to be expensive.

The AAA breaks it down by operating expenses and ownership expenses. Operating expenses include maintenance, tires, and fuel; ownership expenses include insurance, registration, depreciation and interest. The AAA calculates costs of between $11.59 and $18.99 per day. That is a lot—a lot—of money, especially multiplied by two. So, I want to try it with our car, a 1995 Mercury Sable.

Maintenance (which I assume includes repairs): $1.10/day
Tires (two sets over five years): $.38/day
Fuel (miles driven/mileage x $2.941): $2.59/day

Insurance: (liability only): $.60/day
Registration (and taxes and inspections): $.16/day
Depreciation (the difference between what you paid and what you can get): $.66/day*
Interest: $.00

Total cost to own our car: $5.49/day

*I figured this using the car’s current blue book value. But, really, we will probably not sell it. Ever. We will have it salvaged when it can no longer physically move. So, this cost should probably be higher since we will likely never recover any value from it. On the other hand, if we can drive it for another 10 years before its final demise, that cost will be quite a bit lower (on a per day basis).