What Does Your Car Really Cost?

Auto Smarts

If you’re in the market for a new car, you probably have your list narrowed down to two or three choices. You’re probably comparing standard features, options packages, fuel efficiency, and sticker prices. Did you know that the true cost of a car is much more than that sticker price though? Over the lifetime of a car, things like depreciation, fuel costs, and insurance can add nearly 80% to the purchase price of your car!

To get a true sense of what your car costs and help avoid unexpected expenses, research the following added costs to your vehicle:

(Note: Percentages based on TrueCar data estimates for 5-year cost of ownership, based on a $30,000 car)

5% - Taxes

On top of sales tax, vehicles are also usually subject to a variety of other fees, like license and registration costs. These vary by state, but according to TrueCar estimates, fees and taxes can add approximately 5% to the purchase price of your new car.


5% - Financing

Financing a vehicle can add an average of 5% to the purchase price of a car (according to TrueCar data). That percentage can swing higher or lower depending on varying factors, like your credit rating, or special financing offers from the dealer.


9% - Maintenance

To run right for as long as possible, your car literally needs to be a well-oiled machine, and that means keeping up with regular maintenance (especially oil changes). With inspections and filter, fluid, tire, and brake replacements, even regular upkeep can cost an arm and a leg. Costs can run even higher for luxury or high-performance cars that require expensive parts and specialized maintenance. New cars with included maintenance programs can help with these costs, but data still suggests estimating 9% of the purchase price for maintenance fees over the first five years.


17% - Insurance

To cover your new investment (and meet legal requirements) you’re going to need car insurance. Data shows that auto insurance premiums can account for around 17% of the purchase price of the car. However, there are plenty of car insurance discounts available to help drive that percentage down.


28% - Fuel

TrueCar estimates that over a five-year span, your fuel costs average about 28% of the purchase price of your car, but that varies depending on:

  • Current cost of gas.
  • How much you drive.
  • Fuel economy of your car.

Before you buy or lease a new car, check out the window sticker. It usually displays the car’s fuel economy, broken out by highway and city miles. It also usually includes estimated fuel costs based on a 15,000 mile/year rate (45% city/55% highway). This will give you a better idea of actual fuel costs over five years.


36% - Depreciation

Unlike some other major investments, vehicles typically don’t appreciate in value (unless you have a collector or classic car). In fact, it’s fairly well known that a car loses value the second you drive it off the lot. This shouldn’t keep you out of the dealership, but depreciation is something to keep in mind.

Data shows that a new car loses an average of 36% of its value over five years on the road. This varies for different cars; certain vehicles are rated higher in resale or lifetime value based on factors like their durability, gas mileage, and style. You may want to take this into account before buying, to make sure you get the most out of your next car.


Want to save more and make the car buying experience much easier? Try the Farmers Car Shopping Service, offered by TrueCar. This exclusive partnership can save you and average of $3,078 off MSRP*!



* Between 7/1/13 and 9/30/13, the average estimated savings off MSRP presented by TrueCar Certified Dealers to users of TrueCar powered websites, based on users who configured virtual vehicles and subsequently purchased a new vehicle of the same make and model listed on the certificate from Certified Dealers, was $3,078, including applicable vehicle specific manufacturer incentives. Your actual savings may vary based on multiple factors including the vehicle you select, region, dealer, and applicable vehicle specific manufacturer incentives which are subject to change. The Manufacturer’s Suggested Retail Price (“MSRP”) is determined by the manufacturer, and may not reflect the price at which vehicles are generally sold in the dealer’s trade area as not all vehicles are sold at MSRP. Each dealer sets its own pricing. Your actual purchase price is negotiated between you and the dealer. Alt: Neither TrueCar nor Farmers sells or leases motor vehicles.



The information contained in this page is provided for general informational purposes only. The information is provided by Farmers and while we endeavor to keep the information up to date and correct, we make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability or availability with respect to this article or the information, products, services or related graphics, if any, contained in this article for any purpose. The information is not meant as professional or expert advice, and any reliance you place on such information is therefore strictly at your own risk.