Your Financial Success Blog

There’s more to owning a car or truck than making the monthly payment, fueling or charging up, and taking it to the car wash now and then. Before you decide to drive home in something new (or new to you), we have the top 5 hidden costs of owning that vehicle and what they might cost you every year.

1. Maintenance/Repairs/Upkeep: Both gas- and electric-powered vehicles require new tires every five years or so, new brakes and brake pads as needed, as well as tire rotations, wheel alignments, and periodic repairs. Additionally, gas-powered vehicles require oil and fluid changes several times a year.

What maintenance and repairs might cost you: According to AAA, the annual maintenance cost of owning a car is around $1,450. That’s $121 per month. Mechanical Repair Coverage from Mid-Atlantic FCU could help.

2. Depreciation: Most vehicles depreciate with time and usage. That means the value of the vehicle decreases with miles and age. New cars will depreciate up to 30% in the first year, and up to 55% in the first five years, according to Kelly Blue Book. In other words, if you buy a $60,000 new truck, it will only be worth $42,000 in the first year and just $27,000 in five years.

Mid-Atlantic FCU tip: When buying a new vehicle with a loan, consider Guaranteed Asset Protection Plus (Gap Plus) coverage. This acts as an airbag for your vehicle loan, ensuring you don’t end up owing money on a loan if your car is totaled or stolen AND is worth less than what you owe on the loan.

3. Insurance Premiums: In Maryland, all drivers are required to have, at a minimum, liability insurance at all times for their registered vehicles.

What insurance can cost you: The average cost for auto insurance ranges from $1,037 to $2,917 per year, according to the Maryland Insurance Administration. That’s $84 to $243 per month. As a credit union member, you have access to TruStage^TM Auto Insurance at discounted prices.

4. Registration and License Fees: These are some of the most often “overlooked” costs of car ownership. Having a license to drive will cost you $72 per year, and up to $120.50 per year for vehicle registration.

What fees will cost you: While there can be other costs associated with registration and licensing in Maryland, the base fees can add up to $16 per month.

5. Financing Costs: Buying a new or used vehicle often requires an auto loan. The interest rate associated with that loan adds to the cost of the vehicle. If you finance a $45,000 car for 60 months at 6%, you’d end up paying just over $7,000 in interest (or a total of $52,000 for the vehicle).  

Choose Mid-Atlantic FCU for your next auto loan: We keep our rates competitive to save you money. Start your application today.