How to Calculate the Total Vehicle Cost of Ownership at Scott Cadillac

Have you ever stopped to truly think about the total cost of owning a vehicle? There’s more than just the sticker price that comes into play when owning a vehicle. The total cost of ownership refers to the actual cost of owning a vehicle over its lifetime.

When calculated properly, the total cost of ownership helps buyers understand how much they’ll actually spend over a vehicle’s lifespan, including often overlooked expenses. At Scott Cadillac in Allentown, PA, we’re committed to making our customers, like you, understand every factor that goes into owning a vehicle so that you can use the full extent of your buying power.

Calculating the Total Cost of Ownership Step by Step

Buying a new car doesn’t have to be a headache. Here’s how you can take it on like a champ.

Start With the Purchase Price

This includes:

• MSRP or Negotiated Sale Price
• Sales Tax (varies by state, 6% in Pennsylvania)
• Title and Registration Fees
• Dealer Documentation or Prep Fees

Calculate Loan Interest or Lease Charges

Use your loan or lease terms to calculate:

• Monthly Payment (based on APR, loan term, and down payment)
• Total Interest Paid Over the Life of the Loan

If you finance a $40,000 car over 60 months at 5%, you could pay over $5,000 in interest alone.

Estimate Insurance Premiums

Your annual insurance cost depends on:

• Vehicle Make and Model
• Your Age and Driving History
• Location (insurance rates in Allentown, PA, may differ from other cities)
• Coverage Level (liability vs full coverage)

Use local quotes to estimate yearly insurance premiums and multiply by how long you plan to keep the car.

Fuel Expenses

To determine how much you’re spending on gas, follow these steps:

• Calculate your annual mileage (e.g., 12,000 miles).
• Use the vehicle’s MPG rating.
• Multiply by local gas prices (as of now, roughly $3.80/gal in Allentown).

Use this formula: (Miles Driven ÷ MPG) × Gas Price = Annual Fuel Cost

Routine Services & Repair Costs

Be sure to include the following in your total cost calculation:

• Oil Changes
• Brake Pads and Rotors
• Tire Replacement
• Scheduled Services

To offset these costs early on, Cadillac offers maintenance plans that cover some of these services within the first few years.

Vehicle Depreciation

Depreciation is often the most overlooked expense of owning a vehicle, which is why it’s worth understanding how to figure it into your budget.

To calculate depreciation:

• Find the vehicle’s resale value projection.
• Subtract the resale value from the purchase price.

This is a non-cash cost, but it matters if you plan to sell or trade in your vehicle later.

Add Registration, Inspection & Miscellaneous Costs

Depending on your situation, other costs can range from $100 to $300+ per year. These additional costs can cover things such as registration renewal and annual inspection fees. Extra costs to also account for may include parking permits or toll transponders.

Calculate Your Next Vehicle’s Costs with Scott Cadillac

Are you still unsure about the true cost of owning a vehicle? Maybe you just want expert guidance. Whatever the circumstance is, stop by to talk with our finance team at Scott Cadillac in Allentown, PA.

Whether you’re ready to trade in your current vehicle or find your next luxury SUV, we’ll break everything down clearly. Our financial experts will help you crunch the numbers and keep the process straightforward, so you feel in control.

Disclaimer: This content was drafted with AI assistance for initial drafting, reviewed by a subject-matter expert for accuracy, and edited by our team of writers and editors.