Sponsored: The true costs of car ownership

When deciding how much you can afford to spend on buying a car, it can be easy to overlook the inevitable costs that come with car ownership after you leave the dealership. In the excitement of making a car purchase, don’t forget to include the following costs in determining the true financial commitment of owning and operating a vehicle.

Your monthly payment is likely the biggest expense to consider when budgeting for a new vehicle. While you may have a good idea of how much you can spend to buy a car, you may not be sure how to translate the list price into a monthly payment. There are many auto loan calculators available online that can give you a clear picture—like this one from Mountain America Credit Union.

A loan calculator provides helpful insights to help you stay within your budget when car shopping, including modeling with different vehicle prices, interest rates, trade-in values, down payments and loan terms.

No matter if you decide on a traditional gas-powered vehicle or an electric model, you must pay to make it go! A significant amount of your budget will undoubtedly be spent at the gas or charging station, so how do you know how much to plan for? If you use a credit or debit card, your online account history is a great place to start. Look at the past few months and add up all your gas or charging expenses. Determine your average monthly cost and allocate for this amount in your budget. If you typically pay cash, track your purchases for a week or two or estimate how much you spend.

The longevity of a vehicle depends heavily on keeping up with regular maintenance. Although you may negotiate a few maintenance services be included with your car purchase—like a certain number of oil changes, tire rotations or alignments—most maintenance costs will be financed out-of-pocket. In addition to regularly scheduled services, unforeseen issues, such as a transmission leak or brake failure, may arise and demand immediate attention.

One way to ensure you have at least some money saved for an unforeseen repair is to create a secondary savings account for car expenses. Contribute a certain amount monthly—maybe $50 or $100—so when you have an out-of-pocket service or repair expense, you can dip into this account to pay for it. Remember to replenish these funds as quickly as possible.

Almost every state mandates that drivers have auto insurance, so premiums are an unavoidable expense. Your insurance coverage amount is influenced by multiple factors, including the type of vehicle you drive, your age, driving record and where you live. In certain cases, your credit score may even play a role.

Once you decide on the vehicle you want to purchase, do a little research on the cost to insure it. Simply call a handful of carriers and ask for a quote. They can typically provide this information over the phone.

To drive your vehicle legally, it must have a current registration which requires a legal document proving your ownership of the vehicle and records indicating it is safe to operate. The fees to register your vehicle vary from state to state, and registration typically must be renewed every one or two years. In addition to these annual renewal expenses, title fees and emission testing charges should be factored into this area of your budget.

This is an expense that is often overlooked in budget planning. Do you have to pay to park at home? At work? How often do you pay to park for an event or special occasion? Parking expenses should be calculated into your car ownership budget.

There are many benefits of owning a car that make all the expenses above worth it—convenience, safety, comfort and the freedom to hit the road when you choose. But remember these expenses when deciding which car you can truly afford.