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Car costs


The car internal costs are all the costs consumers pay to afford owning and running a car. Normally these private expenditures are divided by fixed or standing costs and variable or running costs. Fixed costs are those ones which do not depend on the distance travelled by the vehicle and which the owner must pay to keep the vehicle ready for use on the road, like insurance or road taxes. Variable or running costs are those which depend on the use of the car, like fuel or tolls.

Compared to other popular modes of passenger transportation, especially buses or trains, the car has a relatively high cost per passenger-distance travelled. Motorists in the United Kingdom seem to spend on the car an average of roughly 1/3 of their average net income, while motorists in Portugal seem to spend 1/2 of their net income. For the average car owner, depreciation constitutes about half the cost of running a car, nevertheless the typical motorist underestimates this fixed cost by a big margin, or even ignores it altogether.

The IRS considers for tax deduction calculations, that the automobile has a total cost for drivers in the USA, of 0.55 USD/mile, around 0.26 EUR/km; and according to the American Automobile Association the average driver of the average sedan, spends totally approximately 8700 USD per year, or 720 USD per month, to own and operate their vehicle.

The yearly depreciation of a car, is the amount of a financial quantity, the car value decreases every year. Normally this value is correlated with the price a certain car has on the market, but on average a car has a depreciation around 15% to 20% per year. Depending on market conditions, cars may depreciate between 10-30% the first year.

Car taxes, road taxes, vehicle taxes or Vehicle Excise Duty are the amount of money car owners pay to the state or to certain regional government within a country, normally yearly, to allow the car to circulate within that region or state. These taxes serve, theoretically according to the respective legal provisions, either to maintain the roads and all the correspondent infrastructures or to compensate the negative externalities caused by the motor vehicles. These taxes normally depend on CO2 emissions, the engine displacement of the vehicle motor, the vehicle weight or on some percentage of the car value.


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Wikipedia

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