By: Annie Bonneville
Introduction
Possessing a car essentially costs a lot more that what the sticker price suggests. The fuel costs and the routine maintenance add up to an incredibly high bill for the average driver. Knowing a car’s cost over time could save one thousands in the long run. Spending more cash up front on a car can sometimes cost one less in the long haul. It is therefore crucial to know when to invest. It is relatively to initially distinguish which cars cost higher to buy. But it is rather harder to know how much more it will later cost you in terms of insurance, fuel, depreciation and even repairs and maintenance. We hereby bring into light these hidden costs during the period of ownership.
Factors considered in owner cost estimates
There are six factors to be considered while estimating the ownership costs of a car. This include:
Depreciation
Interest on financing
Fuel
Average repair and maintenance costs
Sales tax and
Insurance
Depreciation
This is the loss in value of the car over a definite time period.
It is the highest cost factor by far.
Accounts for roughly 48% of the total cost of ownership over a 5 year period.
To compute it, we begin with the cost of a typically equipped model. Then the discounts given on the model are factored in by subtracting the discount figure from the manufacturer’s suggested retail price for the model.
The depreciation for the average model is approximately 65% over a 5 year period.
Some cars depreciate quicker than others. This can be due to rebates on comparable new models, limited appeal, or oversupply.
The estimates based on similar cars can be utilised if there is no data on depreciation for a new model.
Fuel Costs
This can be really high particularly for SUVs.
In order to compute the cost of fuel, it is assumed that the vehicles have been driven for a defined distance per year, say 12000 miles a year.
Then the national average price of fuel is factored in to give the total costs.
It is on average the second highest costs incurred by car owners at about 24% over 5 years.
Interest
This is related directly to the car price.
It accounts for roughly 11% of the ownership costs over a 5 year period.
It is calculated on the basis of a 5 year loan, with a down payment of 15%. This is due to the fact that that is how many individuals that buy cars.
On average, the average percentage rate of 6.0% is utilized.
Insurance
These costs range depending on a variety of factors.
This includes factors such as one’s age, driving record and location.
They can significantly boost the cost of ownership of models that would otherwise seem affordable.
Insurance costs generally make up roughly 10% of the overall cost of ownership over a 5 year period.
Repairs
These costs make up 4% of the cost of ownership on average over 5 years.
The bulk of these costs go to expenses such as tire replacements, oil changes, battery replacements, alternator, radiator, spark plugs and shocks/struts replacements.
A majority of these costs are covered by the factory warranty over the first few years.
Sales Tax
These costs account to about 5.0% of the ownership costs.
london congestion charge contact
One can make the congestion charge payment in a number of ways. This includes auto pay, online payments, at a shop, by post, through an automated telephone service, via text message (SMS) and by phone.
To make a for voice phone enquiry you can reach them through the number 0845 900 1234 for local lines and +44 20 7649 9122 for international lines.
For text phone enquiries for those who have hearing impairment, the number to contact is 020 7649 9123
