## CARS: The Real Cost – PART 6 : FINAL – TOTAL COSTS

**TOTAL COST OF CAR OWNERSHIP**

Over the last 5 articles we have seen that *immediate car costs* pale in comparison to the **truly insane** cash-flow numbers that snowball over a lifetime!!! Let’s cover the total of all costs from all 5 previous articles to get a quick, simple idea of how a difference choice of cars can easily lead to becoming a millionaire. This final article is the **master key** for all car costs,

**You will never look at cars the same again…**

**How much will it cost to own five $4,000 quality used cars with 4 cylinder engines, and liability insurance through life? **

ANSWER: **$503,313**

**How much will it cost to own five $25,000 Mustangs with V-8 engines, and full coverage insurance through life?**

ANSWER:**$1,966,053**

YES, YOU THAT’S RIGHT, let’s look at the reason why:

**These ballpark-figures are simple and accurate based on math anyone could perform.** The ultimate lesson here is that even moderate differences in car costs will lead to monumental changes in wealth loss over a lifetime.

**Of course**, owning zero cars would cost you zero dollars,

But if you drive an average 200+ miles a week, and own around 5 cars over an 80 year adult lifespan, these are the true results:

**VERIFICATION:** THESE NUMBERS REFLECT a LIFETIME OF CAR OWNERSHIP, so the totals will reflect 5 cars bought through a lifetime, all at the same price bracket, purchased and maintained over 80 years, driven 200 miles a week, with average gas price at $3 a gallon. We used the $4,000 used car as the base, and calculate the additional lifetime costs of more expensive cars: we then use basic ‘retirement fund’ math to determine the TRUE lifetime costs of the more expensive purchases. So after 30 years of investment with compound interest we then take that final number and pay you 6% of that total for 30 more years of life. We do that for 1 car, then in each category, take that one-car-total and simply triple it since the money in later years earns much less interest (yes, tripling the number is a shortcut, but the math gets really complex to detail further.) This leads to a conservative estimate, and also accounts for a lot of conditions that could affect your cars, or investment conditions.

**CAR STICKER PRICE ONLY:** 5 different cars over a lifetime at same price bracket

**$4,000 car** = per car $64,324 = (x3) 5 cars over lifetime **$192,973
**— That’s $ 192,973 more than if you never own a car

**$17,000 car** = per car $273,389 = (x3) 5 cars over lifetime **$820,167
**— That’s $627,194 more than if you own cheap used cars

**$25,000 car** = per car $402,031 = (x3) 5 cars over lifetime **$1,206,093
**— That’s $1,013,120 more than if you own cheap used cars

That’s just price, the rest of the costs add up further:

**ENGINE SIZE AND FUEL: 80 years/200 miles per week**

**Electric car** = $15,744 = x2 opportunity costs **$31,488**

**4-Cylinder** = $103,680 = x2 opportunity costs **$207,360**

**V-6** = $157,440 = x2 opportunity costs** $314,880**

**V-8** = $218,880 = x2 opportunity costs **$437,760**

So, we add those numbers to the overall car sticker price mentioned. Next, we account for each car type having very different maintenance and repairs to consider. Some cars cost 3-4 times more to repair than other cars. We used **tire** **price** difference to gather a simple spread of this cost variation: in using tire price, we were **way too kind** with the comparison between fixing cars that are cheaper to fix, versus cars that are expensive to fix:

**MAINTENANCE AND REPAIRS —————**

**Toyota Corolla**: $6,300 = (5 cars/ lifetime) $31,500 = x2 opportunity costs **$63,000**

**Acura**: $9,450 = (5 cars/ lifetime) $47,250 = x2 opportunity costs **$94,500**

**BMW**: $11,340 = (5 cars/ lifetime) $56,700 = x2 opportunity costs **$113,400**

Then of course we have to figure taxes, insurance, and registration to get the overall picture of car ownership costs.

**INSURANCE** **————— **

**Liability Insurance** = $30/month = with opportunity cost losses equals **$98,400** over lifetime

**Full Coverage Insurance** = $70/month = with opportunity cost losses equals **$343,200** over lifetime

**PROPERTY TAX** **————— **(5% car value per year)

**Car valued at $4,000** = $200/ year =** $16,000** / 80 year lifetime

with x2 opportunity costs = **$32,000** over a lifetime

**Car valued at $17,000 **= $850/ year = **$68,000** / 80 years with x2 opportunity costs= **$136,000**…

…that’s **$104,000** more than car valued at $4,000

**Car valued at $25,000** = $1,250/ year = $100,000 / 80 years with x2 opportunity cost difference = **$200,000**…

…that’s **$184,000** more than car valued at $4,000

**SALES TAX** **————— **(just buying the car involves taxes) you can find DMV calculator online, these costs are based on St. Louis Missouri’ current tax rate.

**Car valued at $4,000** = $318 per car = $1590 lifetime = x2 opportunity cost **$3,180**

**Car valued at $17,000** = $1,350 per car = $6,750 lifetime = x2 opportunity cost **$13,500**…

…that’s $10,320 more than car valued at $4,000

**Car valued at $25,000** = $2,000 per car = $10,000 lifetime = x2 opportunity cost **$20,000**…

…that’s $16,820 more than car valued at $4,000

**INSPECTIONS / Yearly Plate Renewal ———
**

**$30 / inspection + $30 to renew plates = $4,800 in a lifetime **(opportunity costs not calculated since these are inevitable costs)

**DISCOVER YOUR PERSONAL GRAND TOTAL**

**THAT’S IT: use these numbers to calculate a rough estimate of your car-cost destiny. Just scan through this article and collect the proper red numbers for a car type of choice. As you see these numbers add up, remember that having $500,000 in the bank at retirement would lead to a decent yearly retirement income payout.
**

**CAR COSTS have an enormous effect:** the HUGE price difference cars and their related costs can translate to a total sabotage of your old-age self. Buying cars of every types seems like VERY COMMON CONSUMER BEHAVIOR, and now you’ve seen that everyone is throwing **boatloads** of cash out the window just to buy some shiny thing…

**NEXT >> **GUT-LEVEL: Early Retirement Savings

**PREVIOUS **>> CARS: The Real Cost – PART 5 : Insurance/Taxes

All Articles: See them listed here

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