Calculating the True Price of Owning a Car: 12 Important Factors That Weigh Heavily on the Overall Cost

When buying a new Peugeot (or even just one new to you) most people only think about one price: the cost of the car. Some might take the financial thinking a bit further and consider all of the add-ons and luxuries in that price as well, but many don’t. No, when it comes to owning a car, the only amount of money most of us consider is the first amount we have to spend.

Unfortunately, the cost of owning a car far exceeds that initial purchase price. In fact, there are many different factors that weigh heavily on the cost.

Whether you’re a first-time buyer or simply a parent trying to explain to your newly licensed teenager how expensive having their own car can be, there are a few details you need to understand.

What’s Behind the Cost of Owning a car

If you’re buying a new Peugeot, understanding what it’s going to cost you in the long run is important. Here are a few factors to consider.

Initial Price and Resale Price

While the initial price isn’t everything, it is important. How much you spend today can affect you for years. Even if you are able to pay the entire cost of the car before you walk away with the keys, you will still be one thing: resale price.

Unfortunately, you aren’t going to be receiving the same amount of money for a preowned car as you bought it for new. As soon as you drive it away, it begins to depreciate in value. Over the years, this will simply get worse. When buying a car, it’s important to factor this in. What you pay now will not be what you get back. You’re going to lose money when you resell.

Mileage

There are three different things to consider when you think about the cost of mileage in your Peugeot.

• Miles per Gallon- How far can you actually go on a tank of petrol? Unfortunately, this differs for many cars, depending on whether you are driving around town or on the motorway. You’re much more likely to get a better miles per gallon rate on the motorway than you will with start and stop driving.

• Annual Mileage- This is an obvious cost. The more you need to drive, the farther you need to drive, the more you’re going to spend on your Peugeot.

• Petrol Price per Litre- This changes almost daily, and is dependent on a number of factors. Location can play a role in the petrol price per litre as well as holiday and the price of oil. To estimate how much you’re going to pay over the car’s lifetime, you first need to figure out how much petrol you use each week. If you can go all week on one tank, then estimate the price it takes to fill the tank completely. Multiply this by 52, the number of weeks in a year, then multiply it by the number of years you hope to own the car. The end result is a good estimation of the total price you’ll pay.

Annual Road Tax and MOT

You annual road tax cost depends greatly on the type of Peugeot you want to buy. This tax is based mainly on the CO2 emissions your car produces, so a cleaner car means a lower tax. Fortunately, with Peugeot, you may be able to get away with paying absolutely nothing, as some of the cars fall under tax band A. The Peugeot 208 1.4 e-HDi 70 EGC, for instance, costs nothing in taxes each year. Of course, different engines and models can make all the difference. The 208 1.6 VTi 120 automatic falls in the tax band F, costing approximately £145 each year.

The MOT is a mandatory test almost every car has to go through, and it costs money each time as well. At the moment, the highest amount a garage can ask you to pay for the MOT is £54.85. They may charge less, however, if they are attempting to bring in new customers.

Insurance and Breakdown Cover

Insurance is mandatory in the UK (as it is most places in the world) so this is a cost you can’t afford to skip. According to estimates, the cost of a three-year-old Peugeot 208 in annual insurance is approximately £216. If you add additional and sometimes necessary options to the insurance, like breakdown cover or protection against theft, fire or flooding, the cost will rise even more. However, if something were to happen to your car, the cost replacing it would be even higher.

Maintenance Costs

Keeping your Peugeot up and running is an important part of the overall costs. This involves making sure every one of the car parts beneath the bonnets are serviced and replaced when necessary. Maintenance refers to two things when it comes to taking care of your car: preventative maintenance and emergency maintenance.

Preventative maintenance involves costs related to changing the oil and switching out Peugeot parts that need to be evaluated and changed every few months, like fuel filters, air filters and spark plugs. It also involves the cost of taking the car to the mechanic on a regular basis to be evaluated for any potential problems.

Emergency maintenance refers to any problem you did not foresee occurring. These issues can be costly and generally require new car parts or repairs to car parts. It may be as simply as installing a new battery, or it may be as complicated having to buy and install a new water pump. When you own a car, these costs are inevitable, and they must be taken into consideration from the start.

Miscellaneous

Some costs of owning a car aren’t as obvious as others. You’ll discover them along the way. You may not realise now, for instance, that your next job is going to require you park in a paid car park. You might not be aware that five weeks from today you let you lead foot take over a bit and wind up having to pay a ticket for speeding.

Life happens, but if you’re going to be ready for the true cost of owning a car, you have to consider all of the possible ways your Peugeot might cost you money.