How to calculate car running costs

Owning a car is not a luxury nowadays – often, each family member has one. As every person has different needs, there’s always a perfect car for everyone. However, buying a vehicle may not be hard – it’s the true cost of owning that can ruin your life.

Whether it’s a new or used car – you will need to spend money on essential maintenance stuff. But used cars are way more dangerous financially, as you aren’t getting any guarantees, and any part may need a replacement soon.

You can buy a 5-year-old compact hatchback with cheap plastics covering every part of the interior or a 15-year-old large, powerful sedan with leather all around you for the same price. The latter choice is tempting, but it all comes down to owning and operating costs. Let’s figure out how expensive it is to maintain your car or the one you’re going to buy.

Main operating costs

Let’s not worry about the most crushing ownership costs and focus on necessary “vehicle needs” first. No matter which car you get, these upcoming operating costs will be regular – the only thing that changes is their size.

Fuel costs

Maybe fuel should be in quotes because electricity is as trendy as diesel or petrol. Anyways, fuel costs add up very quickly when owning a car, and it can get anywhere between 4 and 40 cents per mile. Electric cars usually provide the lowest fuel costs, but if you’re interested in internal combustion engines, small-size engines should provide a similar experience, especially diesel ones.

While diesel engines are more economical than petrol engines, they are also more complex. For example, most modern diesel engines use multiple fuel pumps because the required pressure is about ten times bigger than in petrol engines.

So, find out what fuel consumption is specified for a particular model, and expect no less than that.

Tires

Only tires connect your car to the road, which explains why correct tire choice is so important. A good set of tires can cost anywhere between $200 and $1500, and it adds up to the true cost of owning quickly.

Usually, all-season tires are cheaper in the long run because you don’t need to take your car for a tire replacement twice a year. Even though you should rotate your tires every now and then, many drivers put on all-season tires and forget about them until they wear out.

Some drivers choose used tires, which last no longer than two years. However, new ones should be ok for at least three or four years.

Lifespan depends on the tire’s quality – budget brands usually focus only on one feature and don’t bother improving other ones. For example, it may provide good traction and low noise levels, but its lifespan will be short. Only premium brands can combine everything, but for a hefty price, of course.

Parts

Let’s take brake pads as an example. Even though all of them look similar, front brake pads for Hyundai may cost about $30, but you may need $60 to buy them for your Jaguar. Everything from suspension parts to electronics usually cost more when a luxury brand manufactures the vehicle.

And don’t forget about labor costs – these can vary anywhere between $30 and $300 per hour. Moreover, an average driver can't do much maintenance tasks by himself apart from changing oil and filters – modern cars are filled with sensors and electronic motors. Some models require a diagnostic tool even for replacing windshield wipers!

Registration, insurance, MOT, taxes

Car registration, insurance, and MOT are mandatory in most countries, but additional taxes may also be mandatory.

The true cost of registering a car may vary depending on the car’s type, engine size, and manufacturing date. However, a fixed registration tax is also common.

Car insurance protects you from huge expenses, which can occur even after a small accident. It is mandatory in almost every country, and insurance costs depend on the driver’s experience and car type. Powerful luxury SUVs and sedans usually are more expensive to insure for two reasons: bodywork is more costly, and the chance of getting into an accident is much higher when you have 300 horsepower under your foot.

MOT is a mandatory regular car inspection, which includes exhaust emissions, suspension, engine, and safety system tests. Depending on the country, the MOT test is required each or every few years. Be sure to learn about all possible registration taxes before buying a car.

Unexpected repairs

Any car can create some big expenses out of nowhere, mostly if someone skipped regular servicing in the past. The worst part is that such issues are very common, and some of these generate the highest repair costs possible.

Snapped timing belt or chain

Most internal combustion engines use timing chains or belts to synchronize crankshaft with camshafts. You only need to skip two or more teeth on any gear, and the engine will most likely get damaged.

Experts recommend to replace the timing belt each 60,000–100,000 miles, and it’s 80,000–120,000 miles for a chain, unless the manufacturer's recommendations are different.

Tensioners and guides in the timing system also must be replaced together with chains and belts because each of them plays an important role. Chains and belts stretch, tensioners weaken, and guides wear out.

Moreover, it is recommended to replace the timing set right after buying a second-hand car, unless there’s proof that this has been done recently.

Transmission rebuild

Automatic transmission usually is the most complicated part of a modern car. Its repair costs are high, and not many specialists are qualified to work on them.

Poor quality oil is the most notorious enemy of a transmission. Many car manufacturers state that transmission fluid has to be changed only each 60,000–100,000 miles. However, mechanics recommend doing that at least twice as often.

Some parts, like clutch release bearing or clutch disc, wear out quicker than other parts. You should always be prepared for that, no matter how often you change transmission’s oil.

Battery replacement (hybrid and electric)

Hybrid and electric cars are exceptionally trendy, and they would be even more popular if there was a cheaper solution for rapidly deteriorating batteries. Not only do electric cars have a limited driving range, but the battery’s lifespan also isn’t generous.

Batteries are expensive, so are electric cars, which have loads of these. Moreover, hybrid batteries last about 8-10 years or 100,000 miles. Replacing hybrid batteries cost about $5000, and you can double that for a fully electric car.

High-pressure fuel pump replacement

Modern car engines are getting more efficient because of innovative technology, like refined turbochargers and fuel systems. Modern fuel systems aren’t very different from the ones in 20-year-old cars – the biggest difference is in a pump and injectors.

Fuel pump and injectors are very expensive to replace or repair, especially in diesel engines. For example, pressure in common rail diesel systems can get to 2000 bar, while modern petrol engines only use 130-140 bar.

The worst part is that worn fuel pumps eventually release small metal chips into the system, and you end up replacing not only the pump but fuel lines, sensors, and even injectors. We are talking about hundreds, if not thousands of euros in expenses.

Beware of hidden threats

Many car salesmen try to hide various faults and problems. Every problem you didn’t find is an additional cost of ownership for you. Some hidden threats can only be revealed by an experienced mechanic, but there are some things that you can check by yourself.

Odometer fraud

Odometer rollback is illegal in many countries, but car salesmen still find various ways to cheat and trick buyers into thinking that the real mileage is much lower. This problem already came to the point when it’s hard to find a car with true odometer information – in some European countries, 65%–85% of imported cars have fake mileage.

How to detect this? First of all, drivers do 13,000-15,000 miles per year on average. Sure, you can expect to see smaller numbers in some cases, but then there’s a very big chance of odometer fraud, too.

Why is this important when calculating a car’s running costs? Well, many cars must be generally serviced every 60,000-120,000 miles, and that includes timing chain or belt replacement, fuel system repairs, etc.

Many original suspension parts wear out after about 120,000 miles. So, car sellers want you to think that previous owners have already done all that servicing recently. The truth is, the real mileage can exceed 300,000 miles, and you may need to perform some expensive maintenance to keep the car on the road at this point.

Gladly, VIN decoders nowadays help customers reveal valuable information about the car they are interested in, including the real mileage.

Rust

Car body corrosion problems are very annoying and hard to repair. If you can’t see any rust on the car you’re interested in, it doesn’t mean there isn’t any.

The most comfortable locations for corrosion are the bottom of the car, wheel arches, area around windshield and sunroof, trunk lid, and even front of the car (small chips from rocks).

Sellers often hide rust poorly, so check for bad bodywork, new paint spots, and suspicious areas. Bear in mind that even a small dot of rust will spread in a year or two and add even more expenses to the cost of ownership.

Get ready to spend at least $100 for repairing each part that has been affected by rust. And if it comes to repainting the whole body – you’re looking into deep four-figure expenses.

Bad history

Problems with car titles are so common that checking a vehicle’s history should be a no-brainer for everyone. For example, you may accidentally buy a car that has previously been used as a taxi, rental, or police car.

Such vehicles tend to collect miles more quickly as they’re in constant use, and they may not receive the same level of maintenance and care as privately owned cars. This, in turn, can contribute to accelerated wear and tear, impacting your comfort and potentially damaging the car’s components.

Besides problematic car titles, a vehicle history report can also reveal past accidents and their estimated repair costs if such information is available. This can help you evaluate the level of damage made, bring it to a professional mechanic’s attention, and assess whether (poor) previous repairs could contribute to your car-related future expenses.

Depreciation

How long can you live without replacing your car? Some people use one car for the rest of their lives, but others want to keep it fresh and replace their vehicles every few years. In the latter case, you should be concerned about costs depreciation.

Loss of car value consists of two things: natural costs depreciation and poor maintenance. Big, luxurious sedans and SUVs lose their value very quickly as they become deeper money pits each year – these cars are packed with all kinds of features, which can fail at any moment.

In short – usually, the more expensive it is to maintain a specific car, the faster it will depreciate.

How to sum everything up?

Lots of information to process here, but it helps to grasp overall car operating costs. Now it’s time to sum everything up and see some numbers.

Brief calculation

You can do a brief calculation relatively quickly. Just don’t worry about specific model problems and focus on main operating costs:

• Fuel cost – even a small fuel consumption difference becomes prominent in the long run. Multiply specified consumption by the number of miles you cover over a month or year.
• Tires – most expensive are the ones that do not fit into the standard category. I.e., high off-road, low, and wide sports tires.
• Insurance cost – you can use various car insurance calculators provided by insurance companies in your country. Mainly engine size, body type, and car class affect car insurance price.
• Registration cost – let’s assume that the car you’re interested in has an MOT already, so check registration fees in your country to avoid unpleasant surprises.

Also, don’t forget the first maintenance cost, as there always is something like blown bulbs or dirty seats. On the other hand, if the seller was lazy enough to ignore faulty bulbs before selling his car – he probably didn’t do any maintenance, right?

Detailed calculation

On top of fuel, tire, registration, and other basic ownership costs, you should also examine the high-demand parts’ costs – brake pads and discs, filters, water pump, radiators, and shock absorbers. Compare them with parts for other car models.

If you, more or less, know which model you’re going to buy, search for that particular model reviews and consumer reports. That should introduce you to the biggest risks and common problems for that specific model. One of the worst headaches: buying a car, which is prone to corrosion or/and problems mentioned in the unexpected repairs.

And putting its VIN number in an online VIN decoder is highly recommended; otherwise, you can’t know which car was used as a taxi cab or a police car.

Car owning and operating costs aren’t that high when you know what to expect, especially when you can avoid many unpredictable expenses.