I will tell all of you my story now. I'm probably one of the worst people in the personal finance blogosphere when it comes to cars because of what I'm going to tell you below, but oh well!
If you are new here, we have a Camaro 2SS that we bought last year.
We also have a Jeep Wrangler that we bought around 1.5 years ago as well.
We also used to have a 1961 Chevy Apache (click here to see the pretty picture of it – I miss it a lot), but we sold it two months ago because of a lack of garage space.
We spend a lot of money on our cars, and I know that. It's okay though, we love them 🙂 We are car fanatics, and it is one of the things that we work on making extra money for so that we can afford them.
You are probably rolling your eyes at me now, but please hear me out.
We truly do love our cars and we get a lot of joy out of them. We DO NOT have them so that we can keep up with the Joneses. In fact, I actually dislike talking about our cars because of the judgmental looks/thoughts that we usually get. Wes is a car guy, and it's a hobby for him. I love my Jeep because WHO DOESN'T LOVE JEEPS?
Everyone has something that they enjoy spending their money on, and cars just so happens to be our enjoyment. Just like if you are a stamp or coin collector, spend money on clothes, spend money on traveling, spend money on eating out, etc., cars are our thing (but we like traveling too 🙂 ).
I don't think there is any “right” or “wrong” hobby for a single person, because no two people are exactly alike. If you can afford it, then why not?
However, cars are expensive, and I do realize that!
ANYWAY, to get back on topic, according to a survey done by AAA, the average annual car costs are around $7,000 to over $11,000 (depending on your car – for example, if you pick something in the Volvo car range then you will probably be spending less than an expensive sports car that gets 11 miles to the gallon).
Below are some of the common costs of owning a car.
Buying the actual car.
Usually buying the actual car is the most expensive category when it comes to your car costs. You can buy a car for something such as $500 cash (you can't guarantee that it will work for a long time – however, we did buy a car for $500 once and it lasted us for quite some time, and we were then even able to sell it to another person for $500), or you could buy a brand new car where the price can vary greatly.
Not all cars are equal, and this is where you researching different cars that you are interested in comes in.
Certain cars have higher fuel costs than others. Your car may take only premium gas or it may take unleaded. Your car may run on grease (I have seen this happen with a few older cars), and then your gas costs are very low since you can usually get free grease from restaurants.
Then there is also the associated cost when it comes to fuel mileage. Not all cars get the same fuel mileage, and this is something that you may want to look at when you are trying to determine which car is for you. Some cars may get less than 10 miles per gallon, and others may receive over 50 miles per gallon.
Lastly, when it comes to fuel costs, it also depends on how much you are driving. If you are driving 100 miles roundtrip each day, then your fuel costs will be much more than someone who drives one mile away to their job down the street.
We don't spend much on our fuel costs anymore, since we are both working from home. However, we do like to leave every now and then, with our favorite being to drive to Forest Park (around a 30 mile roundtrip drive).
We spend around $150 to $200 a month on gas. We could definitely be spending less though.
This is one area that we don't spend a lot in, even though we have expensive cars. Your car insurance could be something such as $30 a month, or it could be something like $500 a month. It depends on your car, your driving history and so on.
For us, we spend around $50 for each car, or $100 altogether each month for both of us to be fully insured on both cars. Definitely not bad, especially since others have similar cars to us and they are spending somewhere in the $250 to $500 range each month in car insurance.
We did have to shop around for car insurance though. I don't remember the exact amount, but if we would have stayed with our original car insurance company, I believe we would have been spending around $400 to $450 a month to fully insure our two cars.
Certain cars cost more to maintain than other cars. It's that plain and simple. One car may only take the best oil out there, which may come out to $100 and over for just one oil change. Other cars do just fine with cheaper oil changes, and you may be able to spend a cheap $20 changing your oil yourself.
Also, certain cars are built to last longer than others. Others are made very cheaply and something may break every few months.
What are your annual car costs? Are cars one of your splurges/hobbies?