Car owners in New Zealand should be aware of fixed and flexible costs for a vehicle, as these determine the price for having a car in the long term, according to the New Zealand Automobile Association (NZAA).
The association used a small petrol and diesel car in analysing the average vehicle ownership expenses, which include engine tune-up services, maintenance work and repairs at shops like LRC Automotive.
NZAA defined fixed costs as those that would still require owners to spend money, even if their car is not in use. On the other hand, flexible costs represent fuel and tyres among other consumable expenses.
Some fixed costs for owning a petrol and diesel car include insurance and a vehicle licence. Interest payments are also a factor if you used a loan to buy it. A small car would require you to spend on fixed expenses worth $4,500 each year, according to the NZAA. For flexible costs such as gas, you may end up spending at least $2,400 each year if you drive it for an estimated 14,000 kilometres.
Car owners should take note that the NZAA analysis only provides a general picture of expenses. The brand of a vehicle and its purchases are some of the other factors that would determine the actual ownership cost.
New cars may or may not be cheaper to own in the long term. The Motor Industry Association said that car registrations reached 118,256 units between January and September, up 10 per cent year over year. Low interest rates and a growing migrant population has improved the economy, which supported an increase in car sales, according to MIA CEO David Crawford.
Whether or not you own a new car, the cost of ownership would vary from person to person. Some cars need more frequent maintenance, while others consume more fuel.