Most people assume a vehicle’s cost of ownership is its original price. Unfortunately, the average buyer forgets to calculate the true cost of ownership. Vehicle owners need to contend with multiple expenses after purchasing a vehicle. True cost of ownership adds thousands of dollars into the equation. Sometimes, this figure can be shocking for buyers that think they’re getting a great deal.

What comprises true cost of ownership?

Finding the true cost of ownership requires some mathematics. Typically, drivers will need to account for all annual expenses related to the vehicle. This includes car repair, insurance, fuel costs, and even registration fees. A vehicle owner needs to figure out all these numbers and add them together. At that point, they will have reached their true cost of ownership number.

That “Good Deal” Might Be a Terrible Buy

It is important to figure out true cost of ownership before buying a vehicle. Otherwise, a person might think they’re getting a deal that’s actually a lemon. Many people buy cheaper vehicles that might have a few mechanical issues. They think they’re getting a great deal until they spend thousands in car repair later on. With that in mind, the buyer that calculates true cost of ownership avoids these issues.

Don’t make the mistake everyone else makes!

Too many car buyers simply look at the sticker on the vehicle. In some cases, they’ll be blindsided by a low price and buy immediately. Failure to look deeper into the future costs can doom a person to a bad purchase. Nothing is worse than owning a vehicle that basically bleeds money. These days, more and more people make such mistakes when they choose to buy a new or used automobile.

In the end, true cost of ownership is the most important number for car buyers. There’s no reason a person should simply look at the price tag alone. If you don’t factor in the added costs, then you can’t guarantee you’re getting a good deal. Making this mistake once is permissible, but nobody should fall for this trap a second time.

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