Going all-in: The Full Cost of Car Ownership

A car can be one of the biggest investments you make, often a milestone marker in people lives. Whether it’s the first car, the dream car, the family car, or the mid-life crisis, your car can end up being one of the most used purchases that you ever have.

There are a variety of costs to consider when buying a car, regardless of whether it's used or brand new. The golden rule for buying a car is to always buy what you can reasonably afford. Beyond the initial price of the car, there can be a number of hidden and sometimes forgotten costs of car ownership that can catch you off-guard. Below we’ll go over the various costs of owning a car.


The Price

You probably notice the advertised price of a car before even considering hidden expenses. The MSRP (or Manufacturer’s Suggested Retail Price) of new cars are generally standardize across new cars, so differences in purchase price come from negotiation with the dealer. One thing’s for sure: whichever salesperson you’re working with, you’ll be getting a great deal and their manager is going to kill them.

For used cars, no price is the same so it’s important to consider the condition of the car before buying a used car. An initial down payment for the car is required by most dealers before you can drive it off the lot, but often this is waived during special promotions. This can be up to 20% of the cost of the car.

 If you are considering used, make sure to read our blog post on the right questions to ask before buying a used car.

Documentation Fees, Registration Fees, and Taxes

Certain dealerships require you to pay fees for administration and documentation systems, which alone are generally between $500 and $1500. This is often a payment made to the dealer for signing off on the paperwork and using their filing cabinets for storage. You will be charged these fees by the majority of dealerships because this is how they offset their administrative costs such as sales documents, vehicle inspections and CARFAX reports. Quite often, a dealer may forgo a sale if the fees are negotiated.

At Haus of Cars, we don’t charge for documentation or have hidden fees. Your final bill of sale with another dealer may have a lot of additional fees including prep fees, destination fees, advertising fees and delivery charges. We prefer to make their bills simpler, easier to understand and more transparent for their customers.

One of the most common fees for purchasing a car is the sales tax. The amount is dependent on the cost of the vehicle and where you live. Sales tax can be two percent or almost ten percent of the total cost of the vehicle. Certain governments charge additional special taxes. The tax authority or dealer can inform you of your required tax rate.


Extended Warranties

Warranties are about peace of mind and keeping the overall cost of maintenance down. All new cars come with a standard warranty based on time or the number of kilometers driven, meant to cover any unexpected defects or issues that result from production of the car. Extended warranties, as the name suggests, extends the overall time or kilometers that the dealer will cover costs of repairs and maintenance. While this can be something that's beneficial for new cars, it can be crucial when it comes to any used cars that you might purchase.

There are a few notable reasons why you should purchase a warranty. Any time that you're unable to use your car because of repairs can have quite a considerable impact on your life. While minor repairs could likely be fixed with a trip to an auto-parts store, DYI car repair for major issues isn’t the best idea and can be dangerous unless you’re a mechanic yourself. An extended warranty helps to ensure that your car is running properly year-round to minimize inconveniences, and also avoids a major out-of-pocket expense worth thousands of dollars.

While there are benefits to purchasing an extended warranty, there are a few considerations before buying it. Chief among these is what the car warranty actually covers as some specific scenarios may not be covered. Furthermore, consider your driving habits, especially if you drive long distances regularly, as the majority of warranties still have a finite time or for last for a limited amount of kilometers. Finally, an extended warranty may require that you keep up with your regular maintenance, as not doing so could be a considered neglect and void the warranty.

An extended warranty for a used car is a valuable investment to make. Used cars will already have a noticeable amount of wear and tear before you buy it, which could result in regular repairs. These repairs can quickly add up and become expensive and be unaffordable for many of us. Haus of Cars works with two of the best companies for extended warranties for used cars to maximize customer satisfactions.



Unless you have a large amount of cash laying around that can be spent without concern, most of us don’t have the money on hand required to outright purchase a car and have to finance it. Three options exist for financing: through a bank or credit union, a third-party lender, or through the dealer. Third-party lenders often have high-interest rates (read, higher costs) and restrictive terms, but will lend money if you don’t have good credit. Your preferred bank or credit union will likely lend you what you need, but only to the number of assets that you have with them relative to your credit rating. Going directly through the dealer, should they offer financing, is the most convenient and cost-effective way as the cost of lending through a bank is frequently higher. Our car loan calculator will tell you how much it will cost to finance your car.



You must also consider the cost of car insurance. You can obtain temporary coverage through an insurance binder. This enables you to drive the vehicle off of the lot. This provides you with the time you need to establish a new policy or transfer your existing policy to your new vehicle. You should always research the different types of policies available, ask questions and compare the rates of a few different companies before making your final selection.

Operating Costs

Gas – Yes, you need to put gas in the tank. The more you drive, the more gas is required.

Tires, Brakes and Wipers – These are just some of the things that wear out over time and need to be replaced. Depending on the size of your car, tires alone could be over $1000.

 Parking - $6 per hour adds up pretty quick if you park your car downtown. Think about it: a once per week trip downtown for the day could be over $150 a month just to park!

 Tickets & Towing – We’re human, and we make mistakes. Perhaps you forget to pay for parking one time and you get a ticket, or maybe you didn’t see that fire hydrant and had your car towed. While these are all avoidable, everyone usually gets a ticket at some point in their life. A friendly reminder to please put your phone away while you drive and keep your eyes on the road.

 Maintenance & Repairs – Cars are made up of thousands of parts, and something will break eventually break. Unless you have an extended warranty, repairs and maintenance can be costly.

 Depreciation - Cars are not an appreciating asset, they lose value the minute they are driven off the lot of the dealer and the more you use your car over time. If you ever decide to sell your car, you won’t get as much for it as the initial purchase price. See our blog post here for more on car depreciation.