- BIST10012,151-0.94%
- USD49.34+0.24%
- EUR55.21-0.01%
- GOLD4,192.30+0.04%
- INTEREST37.00%-1.00
- BITCOIN82,695+1.15%
- October 13, 202617°
- BIST10012,151-0.94%
- USD49.34+0.24%
- EUR55.21-0.01%
- GOLD4,192.30+0.04%
- INTEREST37.00%-1.00
- BITCOIN82,695+1.15%
- October 13, 202617°
Extra costs of car ownership can reach 60% of purchase price in five years.
The total cost of buying a new car is not limited to the sticker price. Over five years of use, depreciation, fuel, insurance, maintenance and tyre costs can push the total cost 40 to 60 percent above the purchase price.
Depreciation: The Silent Money Drain
Depreciation, which begins the moment a new car is purchased, constitutes the largest component of total ownership costs. According to experts, the decline in the car’s market value in the first five years accounts for 40 to 50 percent of the total cost.
A car loses 15 to 20 percent of its value as soon as it leaves the showroom. In the following years, depreciation continues at an average annual rate of 10 to 15 percent. By the end of the fifth year, most cars have lost 50 to 60 percent of their purchase price. For example, a car bought for $30,000 may sell for only $13,500 to $15,000 five years later.
Insurance: An Ongoing and Compulsory Cost
Comprehensive and mandatory third‑party insurance are another significant expense of car ownership. The annual premium for comprehensive insurance ranges from 3 to 5 percent of the vehicle’s current value. Total insurance premiums paid over five years can reach 15 to 20 percent of the car’s initial purchase price.
Insurance costs are shaped by factors such as the car model, the driver’s age and traffic history. While comprehensive insurance protects the car against risks like accidents and theft, mandatory third‑party insurance only covers damage to third parties.
Fuel and Energy: The Daily Operating Expense
For petrol or diesel cars, fuel costs make up 20 to 25 percent of the total five‑year cost. A driver covering an average of 15,000 to 20,000 kilometres per year will spend more than one‑fifth of the car’s purchase price on fuel over five years.
Electric vehicles, on the other hand, can reduce fuel costs by 40 to 50 percent when charged at home. However, in some markets, electric vehicles may depreciate faster in the second‑hand market.
Maintenance and Repairs: The Growing Burden After Warranty
During the warranty period, periodic maintenance and repairs are generally covered by the manufacturer, with only consumables such as oil, filters and spark plugs coming out of pocket. After the warranty expires, the replacement of mechanical parts like brake pads, discs and suspension systems drives up costs.
Maintenance and repairs account for between 7 and 10 percent of the total five‑year ownership cost.
Tyres: Inevitable Consumption on the Road
Tyres are an expense that most buyers overlook but are critical for safety. A set of tyres lasts between 40,000 and 60,000 kilometres depending on climate conditions. This corresponds to 2‑3 years of normal use and requires at least two tyre replacements within five years.
Tyre costs add an additional burden of between $600 and $2,500 depending on the vehicle type and wheel size.
Experts’ Golden Advice
Engineer Jihad Mohammed al‑Bashir, manager of a major service centre in Qatar, stresses the need to focus on the total cost of ownership when buying a car. Al‑Bashir recommends choosing models with high resale value and a proven reliability record.
He also notes that buying a one‑year‑old, well‑maintained second‑hand car is a smart strategy to avoid the steep depreciation of up to 20% in the first year. Comparing insurance quotes before purchase and reassessing them each year, as well as choosing cars with only the features you need, also yields savings.
The expert adds that using the car for as long as possible reduces costs, and that the first five years are the most cost‑efficient period overall.
In conclusion, a car’s purchase price is just the tip of the iceberg. While depreciation and fuel costs account for more than 70% of the total cost, the most important criterion for an informed buyer is not the lowest purchase price, but the lowest total cost of ownership in the long run.
Stay Updated with The Turkiye Times
Subscribe to be informed about special news, developments and announcements. We will keep you informed.
By signing up, you agree to our Privacy Policy
