If you don’t control your money, your money will control you. Today let’s focus on getting control over the cost of auto repair and maintenance.
The cost of owning a car
Here’s a look at all the budget categories you may want to consider when attempting to nail down your auto expenses:
- Purchase price – payment (cash and/or financing and interest) to acquire the vehicle
- Taxes – paid when you buy or sell the vehicle
- Fuel – the gasoline/fuel you need to make the vehicle run
- Insurance – all levels auto insurance including personal liability, collision, comprehensive, roadside assistance, etc
- Tags and registration – state vehicle registration, license plates, and renewal tags
- Repair and maintenance – tires, oil changes, and all other repairs and maintenance necessary to keep your vehicle operational
Today we’ll set aside the first five categories and focus solely on budgeting for repairs and maintenance.
Benefits of controlling these costs
Many of the benefits of controlling your auto maintenance costs are similar to those you experience when gaining control over any area of your money, so let’s focus on those that are specific to the topic. Proper budgeting for auto repair and maintenance will allow you to:
- Have a better relationship and better communication with your auto mechanic
- Prepare/plan better so you don’t have to race to get oil changes before your next trip
- Reduce your maintenance expenses going forward
- Relax in the knowledge that you’re prepared
You can achieve all of these things simply by setting aside enough money to cover your expenses. That way you won’t have to stress or worry about where the money is coming from — if it can be found at all.
A simple, average amount
Before we try to determine specific dollar amounts for your individual situation, let’s talk about a simple, average amount that people can start with. If you want a detailed break down of costs for your exact vehicle and situation… Scroll down to the next section.
Earlier this week, I spoke with my trusted auto mechanic — Sam — about how much the average person should budget for auto repair and maintenance. These are the numbers he gave me:
On average $1,200 per year per vehicle, is a great place to start. This means $100 per month for each vehicle.
Remember that these numbers are averages, so… While there will always be exceptions to the rule, this amount should cover “typical” maintenance expenses. Of course, it’s important to actually have this money set aside so you can spend it in a lump sum if necessary.
Robert Espe, a frequent DebtFreeAdventure, says the he budgets $2,000/car per year, and also reminds us that although there is no exact answer that will work for everyone.
Figure out your total cost of ownership
For all you fellow geeks out there who want to nail down costs to the exact penny… This section is for you! Rather than guessing at or estimating monthly amounts, use this information to figure out exactly how much it will cost you to purchase, own, operate, and maintain your vehicle over the entire life of ownership.
Here are a few tools to help you figure out exactly how much you are spending to help you get an idea of how much you need to budget:
The Edmunds tool is only for current car models, whereas the other one works regardless of your situation. Also note that these tools are very comprehensive, even taking into account depreciation. I recommend setting aside some time and playing around with these calculators so you can nail down the real cost of owning and maintaining each of your vehicles.
What about you?
Do you budget for automotive expenses? If so, how much do you set aside for these expenses each month? And if you are looking for a free budgeting tool, check out Personal Capital.