It’s always exciting when buying a new car but the costs associated with owning a car is something all car owners need to be mindful of. When planning your budget, costs such as maintenance, fuel and insurance are important but you also need to take the daily running costs of your car into consideration.
“Too many people assume the cost of the vehicle is the repayment of the loan (if they have one), and fuel. But, in reality, the cost of ownership extends further and owners must know exactly how much they are spending on their cars, and where it is going,” the association says.
There are many variables, which determine the amount of money spent on a vehicle daily, weekly, monthly and annually. It is important owners understand these and, if necessary, manage them better to ensure they do not overspend.
“The type of car you drive, how you drive, the fuel you use (and where you fill-up), the tyres you use, the terrain you drive on, the kilometres you drive daily, weekly, monthly and annually, and the insurance cover you have on the vehicle are just some of the factors you need to consider when calculating the true cost of keeping your car on the road,” says the AA.
The association says maintenance and service plans, instalment payments, and unexpected expenses such as cracked windshields and windows (which, for a small number of owners is covered by insurance, but even this may require excess payments), should also be factored into the total cost of ownership.
“If, for instance, you drive a small sedan at the coast, the total AA rate calculated on the vehicle may be R3.35 per driving kilometre which amounts to R67 000 if you drive 20 000km a year. An SUV driven inland over the same distance is markedly more expensive – around R137 000 per year, R3.75 per day.
However, this doesn’t only cover the cost of fuel, it also covers all costs associated with keeping the car on the road.
People working on a budget must keep a track of these expenses to ensure their vehicle is adequately covered financially at all times,” the AA notes.
The AA says too many motorists or motorcyclists only factor in their fuel costs when calculating how much their vehicles cost them monthly. This, it says, leaves these road users financially exposed, as they may not be setting enough money aside for emergencies.
“Owning a vehicle has many associated costs. If you own a car or motorbike, make sure you calculate all the variables such as tyres, services, insurance, and, in the case of motorbikes – replacement gear – into your monthly budget. Doing this will give you a more accurate picture of the cost of owning the vehicle, even when not being used.”
The association says owning a vehicle requires planning for once-off expenses such as tyres and maintenance. If you have not planned for these expenses, they will seem expensive, especially if the costs are higher than you expect.
Part of planning for an annual vehicle budget, it says, is tracking current expenses by category such as tyres, maintenance and fuel. This will allow you to budget future expenses based on historical data of your usage.
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Source: Automobile Association