Total Cost of Car Ownership, one woman handing one hundred dollar bills to another woman with cars in the background

Budgeting for Your Car

What is the Total Cost of Vehicle Ownership?

We need our cars – for work, school, picking up the kids, going to appointments, or just going home! Buying a car is a big decision. A vehicle is more than a one-time investment; it’s a long-term investment. A car is the second most expensive item in your budget, second to housing expenses.

There’s more to the cost of a vehicle than the sales price including sales tax, insurance, interest on your loan, as well as maintenance, and gas. All these items must be considered when you buy a vehicle. And when you purchase a quality used vehicle at America’s Car-Mart, we’ll sit down with you and discuss this, so you can make an informed buying decision.

At Car-Mart, our goal is to help you be successful. We want to put you at ease and provide peace of mind with your used car purchase. “The number one question we receive from customers is ‘what’s my monthly payment?’ They’re in buy mode. They want a car, and they want it now,” says Chuck Perry, General Manager, Sherman, Texas.

Chuck Perry, General Manager at Car-Mart of Sherman, Texas
Chuck Perry, General Manager at Car-Mart of Sherman, Texas

“Customers are eager, excited, and frustrated all at the same time. But we make sure customers understand what their payments will be, as well the other expenses.”

Chuck explains that they’ll walk through a budget sheet with each customer listing their monthly living expenses. They’ll also discuss the various components of vehicle ownership. “We’ll do a breakdown with our customers because they have to consider more than just the car payment,” Chuck says.

It’s important to know how much you will spend on your vehicle so you can budget accordingly and be prepared for unforeseen emergencies. Here are the components that comprise the actual cost of vehicle ownership:


Yikes, this one is tough with the rising cost of gasoline these days. To determine any kind of budget figure for fuel, divide the number of miles you drive by your car’s fuel economy rating. man pumping gasThen multiply that figure by the price per gallon in your area.

Check out our blog – Save Money at the Pump – to learn 10 tips for overcoming rising gas prices.

Interest on your vehicle loan

When it comes to interest, Car-Mart has one of the lowest rates* in our industry, and it’s included in your monthly payment. Interest is factored in the price of the vehicle and the length of the note.

Taxes and Fees

Taxes are a percentage of the sticker price that varies based on your state’s sales tax. Fees include registration, title, inspection fees and license plates. The price for each of these varies depending on your state. person at desk using a calculatorIn some states, Car-Mart is required to submit the customer’s sales tax to the state and so it’s included in the financing. And in some states, the customer is responsible for paying their sales tax to the state. [Be sure to check with your local manager for more details].

“You should know that taxes and fees can sometimes be over $1,000,” notes Chuck.


Annual insurance rates vary on factors including your age, marital status, credit score and where you live, as well as your vehicle make, model, year and body type.

Maintenance & Repairs

Regular maintenance will keep your vehicle in tip-top shape and running smoothly. mechanic checking over a carBe sure to set money aside for repairs each month.

Remember, Car-Mart has you covered with our optional Service Contract Plus – added protection with three tiers of repair service including oil changes and roadside assistance.

Also, check out our various vehicle maintenance blogs:

Chuck recommends not getting caught up in the moment of buying a vehicle but fully understanding what it takes to own a vehicle – from purchase to pay off. According to Chuck, 20 percent or less of your monthly income is the maximum you should spend on your vehicle payment and expenses.monthly budget

“We want to make sure our customers understand, and that their finances are right,” Chuck concludes. “We want to make sure they are financially aware upfront on vehicle expenses. The last thing we want to do is put our customers in a difficult position. We want to set them up for success with their vehicle, and that will give our customers peace of mind.”

Dare to Compare

Want to know how buying a vehicle at America’s Car-Mart is better than buying somewhere else? Estimate your cost savings over the life of your payment term at Car-Mart versus the competition.

Chuck going over our "Dare to Compare"
Chuck going over our “Dare to Compare”

Run the numbers on our Dare to Compare and see how we offer shorter contracts, lower interest rates and fewer payments than others in our industry.*

*America’s Car-Mart, Inc. Form 10-Q Filed March 10, 2023 (
Source: Q4 2022 Experian State of the Automotive Finance Market Deep Subprime (FICO Score 500 or less) Industry Average.

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