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The cost of an automobile

April 10, 2014

There's a reason there are countless automobile magazines covering a variety of topics published each month:  Americans love their cars.

From sporty convertibles to SUVs capable of taking you off-roading, cars can be a fun escape when you're not stuck in traffic. But as you know, owning a car isn't cheap. In fact, for most Americans, an automobile is the second-largest purchase many will make behind a home.

Make sure your car is covered with the right insurance plan.

However, the costs don't stop with the sticker price of your automobile. There are other items to take into account—such as insurance, fuel costs and repairs—before you can really find out how much it is to run your car on a monthly basis.

“Keep a budget in mind, factor in the usage of the car and see the service history of the car before buying the car,” Rishi Goel, director and CEO, of Shivam Autozone, told the Economic Times.

AAA report

According to AAA, the cost of keeping a midsize sedan maintained and ready to roll for a year might be more than you think.

AAA reported the average American drives about 15,000 miles per year, which would rack up fuel bills of about $3,200 for the average automobile. Granted, many hybrid cars will reduce fuel costs, but hybrids often come with a higher sticker price, canceling the money-saving fuel efficiency they offer? AAA reported license fees, registration and taxes take out another $600 annually. If the car is financed, that will be about another $830 taken from your pocket every year until the car is paid off?

Cost of insurance?

Another major expense is the cost of insurance, and AAA reported the cost of insurance for the average American is more than $1,000 per year.

There are six basic types of auto insurance, and each plan has its benefits based on monthly cost. Those six types include:  bodily injury liability, property damage liability, personal injury protection, uninsured/underinsured motorist protection, collision and comprehensive coverage.

Comprehensive car insurance covers damage that might happen to your car in ways other than a traffic accident. It might seem that this is unnecessary, but if you have a comprehensive plan, your vehicle will be covered from natural disasters, falling tree limbs, theft, vandalism and a range of other potential hazards. For more information on a comprehensive plan, visit SelectQuoteAutoandHome.com.