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Am I well below the average? I spent $22k on a new car in 1999 that I stopped driving in 2022. I would guess I spent $15k on maintenance and repairs, but let's

Am I well below the average? I spent $22k on a new car in 1999 that I stopped driving in 2022. I would guess I spent $15k on maintenance and repairs, but let's go on the high end and say $20k for that. That means it cost me an average of $42k / 23 = $1826 per year for that car, excluding fuel. In a year that I drove 10k miles, when the car's fuel economy was 24 MPG and the fuel cost $4 per gallon, the fuel would cost me 10k / 24 * $4 = $1667. That's $3493 per year. Why is the average so much higher?

alistairSH 4y ago
Insurance, registration, property taxes (in some areas). Not sure if that annual costs includes parking and other things that cost, but aren’t obvious for many people (many of us park for “free”, but we’ve paid for those space through higher rents, mortgages, etc). For the rest of the money, the average new car costs around $50k today. And the average ownership length is about 8 years. Average loan length is approaching 6 years. So, $8333/year to service principal, plus interest, etc. Then only 2-3 years of only fuel/maintenance before starting over again. Plus the majority of depreciation is during those fist few years. On a $50k car, that’s probably $20k of lost value, if not more. Yes, not everybody buys new cars. But, lots of people do, and they spend an ungodly amount of money on them.
- jeffbee 4y ago
  It's hilarious to me that anyone would overlook 25 years of registration fees, considering that Californians literally overthrew their government because of registration fees. Maybe in their jurisdiction it's not that costly.
  - hathawsh 4y ago
    Registration for my 1999 car was only $70 per year and there were no property taxes. Insurance was a more significant cost and harder to estimate, but still not major. Regardless, I agree that these expenses add up fast. If I replaced my regular commutes with a $3000 e-bike that lasts 2 years, and I spent $2k per year on Ubers and rentals for various things that require a vehicle, I would come out ahead.
    - cycomanic 4y ago
      Why would your ebike only last 2 years? I would say even if someone doesn't take care at all for their bike it should last 4 years minimum (and much longer on average).
      - maxerickson 4y ago
        The idea is to ridiculously overestimate the e-bike cost. If you do that and still come out ahead, there's a good case for it.
      - dghlsakjg 4y ago
        Right? My $2k e-bike has lasted far longer than that with a $5 bottle of oil and a few $20 inner-tubes. I spend more for 1 tank of gas than I have on that e-bike for maintenance in 4 years.
  - alistairSH 4y ago
    Here in NoVA, it’s not reg fees, but property taxes. Ends up somewhere around $3000/year for our two car household.
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Aperocky 4y ago
Do you drive without insurance or tags? Those are some major costs.
ww520 4y ago
Yeah, those are crazy numbers. They're assuming the average consumer will drive a $40K car with no downpayment taking on 7~8% loan, with no capture of value when selling the car. If that's the case, it just speaks volume of the inflation and the devaluation of the money that the cost of $10K for car being normalized. With inflation, the money the consumer will get back when selling the car will be higher. That's not factored into the ownership cost.
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smileysteve 4y ago
Yes, you are below average; the average new car is owned for 8 years and the median for 4 years.
- lostmsu 4y ago
  But then it is sold, so you recoup part of the value. Also, average new car cost is the wrong metric. One ether has to use average car cost, including used cars, or track ownership costs of a new car excluding any secondary market transactions. E.g. until it is not road worthy anymore.
eikenberry 4y ago
I'd guess the average is higher due to a few factors. First being that people, on average, don't keep a car nearly that long. Average ownership (after a quick search) seems to be around 5-7 years. Another thing might be your fuel economy given the most popular "car" in the US is a pickup truck. Also there is the cost of insurance, which I'm not sure you counted.
rainsford 4y ago
You are well below average basically across the board. Most people don't keep a car 23 years (I think about half that is average), buy fairly expensive cars (average car price today is well above what you paid even adjusted for inflation), drive cars with less than great gas mileage, drive more than 10k miles per year (15k if I remember right), and buy unreliable car brands that cost a lot in repairs. You're also not factoring in insurance.
crazygringo 4y ago
Following the links [1] with quotes I've selected, the answers seem to be mainly: 1) You forgot about insurance 2) Your car's value was in 1999 dollars, not 2022 -- $1 in 1999 was worth $1.71 in 2022, so you need to adjust your yearly cost upwards into 2022 dollars 3) You haven't mentioned loan interest, which is additional cost if you financed it, which the average person needs to do 4) If $22K was below average for a new car in 1999, then your yearly cost will be below average as well So just multiplying by 1.5 for inflation (an estimation) and adding $1,771 insurance brings us to $7,010. With some cost of financing and if it's a little below average to begin with, it seems to be roughly accurate. -- Source quotes: "The average cost of full coverage car insurance in 2022 is $1,771 per year" "Monthly loan payments for new cars jumped to an average of $700 in the third quarter of 2022, while used vehicle loans averaged $525 per month, according to Experian." "Registration fees vary from state to state. While some states charge a flat fee for all vehicles, others base the registration cost on age, horsepower or weight of the vehicle. Registration fees in Oregon are the highest in the country, ranging from $268.50 to $636.50 for first time registration. Arizona has the cheapest registration fee of just $8..." "A car’s depreciation varies widely. In 2021, the average annual cost of depreciation is $3,900, according to AAA." [1] https://www.bankrate.com/insurance/car/cost-of-car-ownership/#costs-associated-with-car-ownership https://www.bankrate.com/insurance/car/cost-of-car-ownership...
- sokoloff 4y ago
  There’s little reason to carry full coverage on a car over 7 years old and, classic cars aside, almost no reason past 10 years.
  - gameshot911 4y ago
    >There’s little reason to carry full coverage on a car over 7 years old Can you elucidate? I assume by 'full coverage' you mean comprehensive (you get paid if your car gets damaged), vs liability-only (other person gets paid if you damage their dar). Doing some very approximative math, my 7 year old car is worth $12k, and adding comprehensive insurance costs an additional $500/year. Why is it so obvious I wouldn't want that?

alistairSH 4y ago

Insurance, registration, property taxes (in some areas). Not sure if that annual costs includes parking and other things that cost, but aren’t obvious for many people (many of us park for “free”, but we’ve paid for those space through higher rents, mortgages, etc). For the rest of the money, the average new car costs around $50k today. And the average ownership length is about 8 years. Average loan length is approaching 6 years. So, $8333/year to service principal, plus interest, etc. Then only 2-3 years of only fuel/maintenance before starting over again. Plus the majority of depreciation is during those fist few years. On a $50k car, that’s probably $20k of lost value, if not more. Yes, not everybody buys new cars. But, lots of people do, and they spend an ungodly amount of money on them.

jeffbee 4y ago
It's hilarious to me that anyone would overlook 25 years of registration fees, considering that Californians literally overthrew their government because of registration fees. Maybe in their jurisdiction it's not that costly.
- hathawsh 4y ago
  Registration for my 1999 car was only $70 per year and there were no property taxes. Insurance was a more significant cost and harder to estimate, but still not major. Regardless, I agree that these expenses add up fast. If I replaced my regular commutes with a $3000 e-bike that lasts 2 years, and I spent $2k per year on Ubers and rentals for various things that require a vehicle, I would come out ahead.
  - cycomanic 4y ago
    Why would your ebike only last 2 years? I would say even if someone doesn't take care at all for their bike it should last 4 years minimum (and much longer on average).
    - maxerickson 4y ago
      The idea is to ridiculously overestimate the e-bike cost. If you do that and still come out ahead, there's a good case for it.
    - dghlsakjg 4y ago
      Right? My $2k e-bike has lasted far longer than that with a $5 bottle of oil and a few $20 inner-tubes. I spend more for 1 tank of gas than I have on that e-bike for maintenance in 4 years.
- alistairSH 4y ago
  Here in NoVA, it’s not reg fees, but property taxes. Ends up somewhere around $3000/year for our two car household.

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Aperocky 4y ago

Do you drive without insurance or tags? Those are some major costs.

ww520 4y ago

Yeah, those are crazy numbers. They're assuming the average consumer will drive a $40K car with no downpayment taking on 7~8% loan, with no capture of value when selling the car. If that's the case, it just speaks volume of the inflation and the devaluation of the money that the cost of $10K for car being normalized. With inflation, the money the consumer will get back when selling the car will be higher. That's not factored into the ownership cost.

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smileysteve 4y ago

Yes, you are below average; the average new car is owned for 8 years and the median for 4 years.

lostmsu 4y ago
But then it is sold, so you recoup part of the value. Also, average new car cost is the wrong metric. One ether has to use average car cost, including used cars, or track ownership costs of a new car excluding any secondary market transactions. E.g. until it is not road worthy anymore.

eikenberry 4y ago

I'd guess the average is higher due to a few factors. First being that people, on average, don't keep a car nearly that long. Average ownership (after a quick search) seems to be around 5-7 years. Another thing might be your fuel economy given the most popular "car" in the US is a pickup truck. Also there is the cost of insurance, which I'm not sure you counted.

rainsford 4y ago

You are well below average basically across the board. Most people don't keep a car 23 years (I think about half that is average), buy fairly expensive cars (average car price today is well above what you paid even adjusted for inflation), drive cars with less than great gas mileage, drive more than 10k miles per year (15k if I remember right), and buy unreliable car brands that cost a lot in repairs. You're also not factoring in insurance.

crazygringo 4y ago

Following the links [1] with quotes I've selected, the answers seem to be mainly: 1) You forgot about insurance 2) Your car's value was in 1999 dollars, not 2022 -- $1 in 1999 was worth $1.71 in 2022, so you need to adjust your yearly cost upwards into 2022 dollars 3) You haven't mentioned loan interest, which is additional cost if you financed it, which the average person needs to do 4) If $22K was below average for a new car in 1999, then your yearly cost will be below average as well So just multiplying by 1.5 for inflation (an estimation) and adding $1,771 insurance brings us to $7,010. With some cost of financing and if it's a little below average to begin with, it seems to be roughly accurate. -- Source quotes: "The average cost of full coverage car insurance in 2022 is $1,771 per year" "Monthly loan payments for new cars jumped to an average of $700 in the third quarter of 2022, while used vehicle loans averaged $525 per month, according to Experian." "Registration fees vary from state to state. While some states charge a flat fee for all vehicles, others base the registration cost on age, horsepower or weight of the vehicle. Registration fees in Oregon are the highest in the country, ranging from $268.50 to $636.50 for first time registration. Arizona has the cheapest registration fee of just $8..." "A car’s depreciation varies widely. In 2021, the average annual cost of depreciation is $3,900, according to AAA." [1] https://www.bankrate.com/insurance/car/cost-of-car-ownership/#costs-associated-with-car-ownership https://www.bankrate.com/insurance/car/cost-of-car-ownership...

sokoloff 4y ago
There’s little reason to carry full coverage on a car over 7 years old and, classic cars aside, almost no reason past 10 years.
- gameshot911 4y ago
  >There’s little reason to carry full coverage on a car over 7 years old Can you elucidate? I assume by 'full coverage' you mean comprehensive (you get paid if your car gets damaged), vs liability-only (other person gets paid if you damage their dar). Doing some very approximative math, my 7 year old car is worth $12k, and adding comprehensive insurance costs an additional $500/year. Why is it so obvious I wouldn't want that?