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How Much Should You Spend on a Car?

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Owning an automobile is a requirement in many parts of the world. Sure, public transportation is available to help you get from point A to point B. In many cases though, public transportation does not extend to numerous areas, requiring many people to purchase a car. Ever since their creation in 1885, automobiles have served a variety of purposes.

For many of us, cars are a way to get back and forth to work. Others might use a car to run errands or to go on vacation. Whatever their purpose, or use, cars are essential for many people. When you make a decision to add an automobile to your life, you’ll first want to ask, “How much should I spend on a vehicle?” Below are some points which will help you answer this question.

Average Cost of a Vehicle

In Australia, the price range for the most affordable used vehicles ranges between $22,000 to as high as $77,000. Depending on the quality of the vehicle, the brand, and other factors, the price of the vehicle can fluctuate. In August of 2020, there was a rush on used vehicles in the country. This 30% increase in pricing for used autos occurred because buyers were rushing to avoid using public transportation, as well as new car dealerships facing stock shortages.

In the United States, new automobiles cost approximately $36,718 on average in 2019. These include newer models bought at dealerships, which are fresh off the factory floor. In 2020 the cost of a light vehicle jumped to $37,851 January 2020. Used cars between the period of 2016-2019 cost around $21,000. In the case of seeking out used cars, it’s often best to check out the Kelley Blue Book. This resource will help you to figure out what the actual cash value of your car is, whether it’s a used automobile or a new one.

Car Insurance Costs

How much should you spend when it comes to car insurance? Australians pay an average of $1,131 a year for their car insurance. The difference between the costliest and the cheapest insurance plan across that country is $1,047 on average. There are factors like age, gender, and driving experience which factor into the overall cost when it comes to choosing the best car insurance. The most common aspects of car insurance which many Aussies use are comprehensive car insurance, third party insurance, fire insurance, and theft insurance.

Checking with a quality insurance provider can help you to choose the best insurance product. You might find that your car insurance policy might need to include property damage, collision insurance, gap insurance, bodily injury liability coverage, and many other types of coverages. To be safe look into comprehensive coverage so that you’re covered in the case of a car accident or a natural disaster such as a tornado, or even earthquakes and hurricanes. You’ll want your car insurance to cover everything from your medical expenses to a new windshield.

Finding the right insurance provider will help you to choose the best auto insurance without it being too costly. Your insurance provider might even be able to help you find a discount or two. Finding such auto insurance will help you in figuring out how much your car will cost.

Vehicle Maintenance Costs

Vehicles require a lot of maintenance over the years. Such repairs are just as important as obtaining auto insurance. It’s important to factor this into how much you’ll spend on a car in repair costs, in the case of say, property damage caused by a traffic collision. In Australia, car repairs can start at an average of $80 per hour, and automobile mechanics can charge between $69-$80 an hour for auto repairs. These costs can depend on certain factors, including the severity of the problem, and the necessary replacement parts. Depending on the property damage you’ve incurred, you might be looking at paying between $185-$2,225. In some cases, a car repairman might offer a discount for their services, but more often than not, you will be looking at paying full price for your repairs.

Gas Costs

Cars require gasoline to operate, so it’s best to figure out much money you’ll need to spend on gas. At gas stations across Australia, the cost of gasoline is about $1.40 Australian dollars per liter for unleaded petrol. The average gas value for Australia during the period of July 27th, 2020 to November 02, 2020, was $1.21 Australian Dollar with a minimum of $1.15 Australian Dollar on September 20, 2020.

All of these items — auto insurance, gas prices, and maintenance and repairs — go into the cost of owning a car, so keep them in mind as you considered your choice of car to purchase and how you plan to finance it.