A Ferrari Enzo is one of the most expensive cars around, and every time one of these gets totaled, it ends up in the news. There was a particular one that was wrecked by comedian and actor Eddie Griffin. There are not very many of them around, so trashing one will get you some publicity. Such cars are priced at $1.5 million, so the sight of this total loss almost made me wince as hard as when I found out how much my 93,000 mile service was going to cost me last week. Somehow, I felt the same pain that the loss of such an exotic car must’ve cost its owner, even though I was simply $2,000 lighter. The amount was such that I wondered if I were being fleeced for what I believe is a straightforward car check up. Still, I patronize a reputable dealership and my vehicle is an 8 seater van that was bogged down with what the dealer claimed were busted brakes, cracked engine mount, and old sparkplugs.
Take a look at my charges.
Maintenance Fees for One Family Van
| Description | Labor | Parts | Total |
| 90,000 Mile Service | $295.40 | $104.55 | $399.95 |
| Replaced timing belt, water pump and accessory drive belts | $687.50 | $319.06 | $1006.56 |
| During service, found side engine mount cracked. Replaced side engine mount. | $67.50 | $63.95 | $131.45 |
| Recommended replacement of spark plugs. | $0.00 | $125.70 | $125.70 |
| Replaced front brake pads and resurfaced front brake rotors. | $188.38 | $61.57 | $249.95 |
| Performed powersteering fluid service. | $83.41 | $6.54 | $89.95 |
| Hazardous waste | N/A | N/A | $5.00 |
| Parts discount of 10%. What’s this, goodwill? | N/A | N/A | ($45.28) |
| Tax | N/A | N/A | $56.21 |
| TOTAL | 1322.19 | 681.37 | $2019.49 |
This is some serious outlay for us! So before you purchase a vehicle, be aware of its true costs of ownership. Depending on the kind of car you get, it may end up actually costing you more than you think it will. Here is a chart showing what a family van can really run you, taking all its costs into consideration. Incredibly, I’m seeing that the total cost of owning my van appears to be actually twice the retail price I paid for it!
OUCH.
Chart is from Vincentric.com
Here’s a review of what affects a car’s true cost:
Factors Affecting A Car’s Costs
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Brand: Your car will cost you a bundle if it’s been built by a manufacturer with a sterling reputation.
Design and Assembly: A well-designed car will be able to withstand accidents and crashes for less damage and consequently, less cost. For the same type of vehicle, the differences in repair costs can range in the thousands.
Features and Technology: With time, cars have gotten more sophisticated and advanced with the features they offer. I can’t imagine how I’d survive without the GPS systems that are today, part and parcel of many automobiles. And I still remember how I was persuaded by a car salesman to purchase a special warranty to cover the electronics of a vehicle I had purchased. Goes to show that special training may be necessary for dealing with the more specialized parts of cars today.
Where Your Car Was Built: Do you have a foreign car? An imported car will most likely require imported parts and hard-to-find replacement parts may cost you more to track down.
Luxury Status: By virtue of owing a luxury model, you will probably be subject to higher costs for service and materials. You will end up paying a premium for the special status of owning such an enviable vehicle.
And to get the real picture, let’s list all the costs and fees that come with buying the transport of your dreams. Information was compiled from Vincentric and MSN Money.
Actual Car Ownership Costs
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MSRP: This is the manufacturer’s suggested retail price. This information can be taken from sites such as Kelley Blue Book or Chrome Systems. This is more commonly known as the list price or “sticker price”, for the large sticker on the windshield as a way to advertise to potential customers. It doesn’t include taxes, registration, transportation to the dealership and other miscellaneous fees. While most people expect to get a discount off the MSRP, when all of the extraneous charges are added in, the final price might be approximately that of the MSRP, or actually higher.
Maintenance Costs (scheduled and unscheduled): There are three elements that comprise the maintenance cost: Frequency, Labor Rates, and Parts prices. In addition, there are both scheduled and unscheduled maintenance.
Repairs: Repair costs are those paid by consumers to keep their vehicles in operating condition, excluding the cost for scheduled maintenance.
Depreciation Costs: Depreciation is the reduction in value a vehicle incurs during a given period of time.
Gas Mileage or Fuel cost: How well is your car burning its fuel? You can estimate your fuel costs by increasing gas prices by 3% each year to keep up with inflation. Though gas prices fluctuate, it is still a good idea to budget conservatively.
Insurance cost: Your actual insurance cost will depend on where you live, your driving record and your age. It can vary by type of vehicle, driver, and coverage amounts.
Financing: This is the amount it costs to borrow money for a vehicle purchase. Every deal will vary depending on the amount of your down payment and your credit rating. Check the latest auto loan rates to estimate your monthly car payment.
Fees and Taxes: These administrative fees also add to the cost of owning a vehicle. Taxes and registration fees vary greatly by state, especially for high priced vehicles.
Opportunity Costs: This cost takes into account the loss of interest earnings that could be earned with the funds spent on a new vehicle. The lost “opportunity” to earn interest income is an often overlooked cost of buying a vehicle, but nevertheless is critical to understanding overall costs and a key component when comparing one vehicle to another.
We have two cars: a small sedan and a van for the family. It’s no surprise then that we want to keep our vehicle maintenance obligations few and limited to what is necessary to run our affairs. I still wonder why some folks we know bother with more than a couple of cars, but I guess there are just some people who can’t help but be attached to their automobiles. Well then, they’ll just have to pay up.
Copyright © 2007 The Digerati Life. All Rights Reserved.
{ 28 comments… read them below or add one }
You can look at your cost outlay on your 90K mile service like this: (I sold cars and also did service advising)
How much life is left in this vehicle? At 93K miles, with average care the van should go 150K miles or more. If you spend $2,000 to squeeze another 50K miles out of it or you can walk into the showroom and spend $30K to put 50,000 miles on a new one.
Do you really need a new car? If the one you have now is fine, fix it an keep it until it is just no longer worth keeping on the road. (Too many miles, wear&tear, unsafe, rust, etc)
A new engine can cost $2,500+ to replace. You got brakes, timing belt and other services for less than that. The timing belt in very important because if that snaps, your engine is toast.
Hope this helps!
That Ferrari Enzo crash is rumored to have given the movie more unintended advertising than 1.5M would have provided. I’m not so certain that is true, but in the grand scale of some movie budgets a little advertising via something like this can generate a little buzz.
formul8,
Nice discussion on auto costs. You have a refreshingly real unspun unconsumerized perspective.
Aaaah. . . one reason why I love living in New York. No car!
True, there are expenses associated with your car, but as with anything, they can be contained.
It’s good to remember, though, that there’s more to a car purchase than just the purchase price.
-limeade
Thanks for all the insightful commentary! I guess the point here is to pad your vehicle budget and be prepared to pay up beyond the sticker price. I really shouldn’t have been so shocked about the charges.
You can save a little on roadside service by not going with AAA – and they do stuff like lobby AGAINST higher mpg standards. I don’t know if you need to be over 50, but AARP has a cheaper, perfectly good service.
Even cooler is this green roadside service: http://moneychangesthings.blogspot.com/2007/03/better-world-auto-club.html
Great write-up.!
Having a car of your own, also gives one a responsibilities. First and foremost, – the budget. The car needs maintenance. Speaking of which one must have a budget on its repair, replacement. Car should be well maintained so as to avoid defects on its parts like volkswagen window switch, etc. A car that is well maintained should save us from expenses. Whatever car you own as long as all parts are working and its performance is good – the car is long way to go. It is also important to take a car as an investment.
I always wondered how those luxury vehicles could cost so much. I wonder if they have excellent materials or there is just a huge profit margin.
One thought – I have found that having a car serviced at a dealership is quite expensive. The money for the 90k service is one example. The local dealership shop managers here are trained like used car salesmen – they oversell services before they are really needed.
I would recommend finding a good local mechanic that will give you services when you need them and an honest assessment of what is really needed.
I’ve written a post describing why I don’t use car dealerships to service my cars – maybe you will find it useful?
Holy cow! spark plugs are 5$ at Nappa, power steering fluid service? Man, buy a turkey baster and change it yourself. Brake pads- 12.50, timing belt- 40.00, turn brake rotors- 20.00, dealership service manual- 100.00, if you don’t want to pay 65 bucks and hour for shop time- do it yourself.
timing belt at 93K… you must be driving an Audi?
Although it is true that Toyota parts are more expensive than their American competitors, I recently asked a New York taxi driver how he was getting along with his well-worn Toyota minivan, compared to the majority of Ford Crown Victoria cabs. He pointed out that the Toyota automatic transmissions are perhaps 35% more expensive than the equivalent transmission for a Ford. Having said that, he noted that the Toyota drivers were getting double the mileage from their transmissions. Perhaps there is a reason the Toyota parts are more costly.
The American manufacturers have honed the bean counter/engineer ratio to a point where their components can generally last through the warranty period, but it’s anyone’s game after that. Contrast that to the same components manufactured by Toyota or Honda, where properly cared-for engines and transmissions will easily make 200 – 250 thousand miles or far past the warranty coverage.
And our nation’s psychology has moved so that everyone is attempting to save money. Airline travel is now unbelievably cheap, but is a miserable experience. We accept as a matter of fact that we need to push through several layers of voicemail just to get an answer from a bank, telephone company, doctor’s office or other “service” which we pay for. At what point do we learn to pay for some quality of life? Personally, I would prefer to fly less, and drive less if it means that I am enjoying not only the destination, but the means to get there.
Good article. Several thoughts I had:
1. Double the purchase price is EXTREMELY conservative. Just consider gas prices by themselves; for 150,000 miles at $3.00 per gallon at 20mpg, that comes to $22,500.
2. You have to be careful when factoring in inflation (which you did for fuel cost). If you’re talking about cost of ownership in today’s dollars, and gas prices only keep pace with inflation, then you can effectively use today’s gas prices to find the lifetime gas cost in today’s dollars. If not, you have to apply inflation to everything, and that gets much more complicated.
3. I suppose the type of car or type/style of driving affects maintenance cost quite a bit. Because my family has never had significant repair costs with any of our cars (mostly Honda and Toyota sedans). I’d estimate
4. When deciding whether to drive or take other transportation (bus, train, plane), I find it useful to apply the corporate reimbursement factor. My company right now reimburses about 49 cents per mile for work-related travel with a personal vehicle. This includes gas (10-15 cents per mile), but the rest is just for wear & tear (depreciation) on the car. That’s a pretty significant amount — about $7,000 per year with average driving!
A car is the second most important asset after a home. there might be some recurring costs associated with an automobile. Thus while buying a car it is advisable to check out the technical details to get an estimation of the recurring expenses. Apart from that get the car insured once you buy it. The market offers a host of car loand schemes ranging from used car loans to bad credit car loans that can further faciliate in buying a car.
alfred, you almost have it right, a car is a person’s second most expensive purchase in life typically. there are very few cars out there that could be considered an asset, though, as very few cars will appreciate
I think you must really like your dealership–you’re almost their best customer! =) That being said, I had some major maintenance done on my car at my trusted mechanic and they were a lot less than your cost. I paid for new timing belt, water pump, another belt etc . . . along with engine tune-up, new spark plugs — $473 in Jan 08. Last year, to replace my brake pads etc . . . was around 150. Now I have a smaller car, but I know someone who went to him in Feb 08 with an SUV and to service everything and new belt, pump, plugs, etc . . . was under $800. Both of our cars are Japanese cars so not sure if the prices are less or more for the parts.
Do I trust my mechanic–heck yes. How did I find him? Another mechanic recommended this mechanic. Someone else I know found this mechanic by asking a gas station owner who they take their car to. I think dealerships are fine, but in order to save some money, it might be worth it to start asking around for a good mechanic. Not to knock dealerships who might also have really good mechanics, but usually it costs less to go with a small business mechanic.
Great post! I suspect depreciation costs will sky rocket in the next 10 years as technology evolves in the direction of fuel efficiency. Any thoughts on the future adoption rate of the hybrid?
This will definitely help the buyers to rethink their automobile expenditures strategy.
Very informative indeed. This will compel the buyers to change their future thoughts.
Wow! Extremely detailed writeup – I don’t think many people think about the ‘true’ costs of many things they buy, which is actually very unfortunate. Thanks a lot for the info!
Wow! Extremely detailed writeup – I don’t think many people think about the ‘true’ costs of many things they buy, which is actually very unfortunate. Thanks a lot for the info!
Nice post.
I think an awful lot of people don’t take even a third of what you’ve listed into consideration when buying a car. They get taken in by the salesman’s promises and the showroom gloss and forget that a car is a lot more than just a one off cost.
I’d love to see the running costs of that Enzo though!
I just bought a new Alfa Romeo back in November, hardly a luxury badge, yet costs for parts are higher than for my old BMW? How does that work?
Did save a little money by buying car mats online instead of from Alfa Romeo.
Those actors have plenty of money; they’ll just go and buy another 1.5 million dollar car. Auto maintenance can add up that’s why you should only buy a car that you can afford.
OUCH is right! As soon as I saw the pic of the Enzo I almost cried, such an amazing vehicle.
I feel your pain on those charges also, things can add up really fast. It’s tough to know whether the shop is telling you the complete truth or if they’re looking for something extra to throw on the bill to make a quick buck. Sometimes they have your interests in mind, but more often than not they’ll tell you something needs fixing when it really doesn’t. Hopefully that shop did you right.
I think the cost of maintenance of a car in it’s entire life is greater than it’s initial cost.