The True Cost Of Owning A Car.doc

The True Cost Of Owning A Car Everyone knows that cars are expensive. In addition to the cost of acquisition, theres maintenance, insurance and the ever-increasing cost of gasoline. We all know that those costs add up, but few of us know exactly how much it really costs to own a car. Lets take a look. Government EstimatesAccording to Consumer Expenditures in 2006, released in February of 2008 by the U.S. Department of Labors U.S. Bureau of Labor Statistics, the average vehicle costs $8,003 per year to own and operate. The breakdown of the figure comes to $3,421 for purchasing the vehicle, $2,227 in gasoline and motor oil expenses, and $2,355 in other vehicle-related costs. As one might expect, the least affluent spend less than?the most affluent. In fact, the nations most affluent quintile spends a whole lot more, with their $15,198 in annual vehicle expenses coming in at nearly six times the $2,856 spent by the least affluent. An overview of vehicle expenses based on household income is provided in figure 1 below. Item Lowest 20% of Income Earners Second 20% of Income Earners Third 20% of Income Earners Fourth 20% of Income Earners Highest 20% of Income Earners Total $2,856 $5,058 $7,310 $9,571 $15,198 Purchase $987 $1,954 $2,940 $3,774 $7,442 Gasoline/Oil $991 $1,624 $2,182 $2,829 $3,508 Other $879 $1,489 $2,188 $2,968 $4,248 Figure 1: 2006 household cost of owning a vehicle per quintiles of income. Source: Bureau of Labor?Statistics Statistics From the American Automobile AssociationThe American Automobile Association (AAA) also compiles statistics on the cost of driving, and has been doing so since 1950. In its 2007 Your Driving Costs survey, it summarizes the cost of gasoline, maintenance, insurance, license and registration,?loan finance charges and depreciation costs for a variety of vehicles. That data is summarized figure 2 below. (For related reading, see Shopping For Car Insurance.) 2007 Model 10,000 Miles per Year 15,000 Miles pe