Leslie Kasperowicz holds a BA in Social Sciences from the University of Winnipeg. She spent several years as a Farmers Insurance CSR, gaining a solid understanding of insurance products including home, life, auto, and commercial and working directly with insurance customers to understand their needs. She has since used that knowledge in her more than ten years as a writer, largely in the insuranc...

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Joel Ohman is the CEO of a private equity-backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He also has an MBA from the University of South Florid...

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Reviewed by Joel Ohman
Founder, CFP®

UPDATED: Nov 15, 2020

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The cost of buying and owning your dream car involves more than simply the purchase price and a big rebate.

When calculating how much you can afford to spend on your new car, it is important to consider other hidden charges, such as those listed below.

Fuel Economy

Nowadays, it is hard to predict fuel prices’ stability because they fluctuate at different times of the year.

They rise and fall, sometimes by surprisingly considerable amounts.

With this in mind, you should make sure that you are getting nothing but a fuel-efficient car with a powerful engine and burns less fuel, such as the Toyota Yaris or the RAV4, if you are looking for an SUV.

Best Vehicles with the Highest Gas Mileage

Below is a table of vehicles with the best gas mileage as of 2020.

All of the cars are under $30,000 except the Chevy Volt.

The MSRP for it is $33,220.

All of the vehicles get at least 43 miles per gallon in the city.

The highest is the Toyota Prius at 58 mpg.

Hyundai Ioniq57 city / 59 highway $22,2001.6-liter four-cylinder
Toyota Prius Prime55 city / 53 highway$27,100Standard gas engine / electric motor
Toyota Prius58 city / 53 highway$24,6851.8-liter engine paired with two electric motors
Kia Niro52 city / 49 highway$22,8901.6-liter four-cylinder engine and electric motor combination
Honda Accord Hybrid49 city / 47 highway$29,6052.0-liter four-cylinder engine and electric motor
Chevrolet Malibu Hybrid49 city / 43 highway $27,8751.8-liter four-cylinder engine and two electric motors
Toyota Prius c48 city / 43 highway$20,1501.5-liter four-cylinder engine that’s paired with an electric motor
Chevrolet Volt43 city / 42 highway$33,2201.5-liter four-cylinder gasoline engine, two electric motors, and battery
Ford Fusion Hybrid43 city / 41 highway$25,7852.0-liter four-cylinder gas engine and one electric motor
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Government Charges

When buying a new car, you should be prepared to pay the registration transfer fee, stamp duty (if in another country), motor vehicle tax, and compulsory third party insurance.

The registration transfer fee and stamp duty vary from one state to another and are paid once.

Motor vehicle tax and third-party insurance, which covers injuries you cause to other people, are paid monthly or annually, varying from state to state.

There is a fee calculator on most state licensing websites.

Property & Sales Tax Rate by State

I have a list below for the amount of tax you may pay every year for a $23,000 vehicle.

The amount paid every year is the “Property Tax” of the state.

A lot of states have a $0 property tax.

Included is the sales tax rate for each state.

As you can see, some states have one or the other.

While some have both.

There are only two states in which you pay no sales or property tax – Alaska and Oregon.

StateProperty Tax RateAnnual Tax Cost $23,000 vehicleSales Tax RateDealership Median Doc Fee
Alabama0.75%$1742% + county rate
+ city rate = total
Alaska 0.00%$00% + municipality$200
Arizona1.68%$3885.6% + county + city$429
1.04%$2406.5% + county + city
= rate on 1st $2,500
-- plus --
6.5% on balance
0.65%$1507.25% + local$80
1.79%$4122.9% + county + city
+ district
Connecticut2.41%$5556.35% for vehicle $50k or less
7.75% for vehicle over $50,000
Delaware0.00%$04.25% "Motor Vehicle
Document Fee"
District of Columbia
0.00%$06% "Excise Tax" for
vehicles under 3,499 lbs
7% for vehicles 3,500
to 4,999 pounds
8% for vehicles 5,000
pounds or more
0% for hybrid vehicles
rated over 40 mpg by
Florida0.00%$06% + local "discretionary"
= rate on 1st $5,000
-- plus --
6% on balance
0.00%$04% + county$599
Hawaii 0.00%$04.166% "maximum
visible pass on rate"
4.712% for Honolulu
County (Oahu Island)
Idaho 0.00%$06%$299
Illinois 0.00%$06.25% + local (+ 1.25%
more in Chicago)
Iowa 1.00%$2315% "One-Time
Registration Fee"
Kansas 1.80%$4166.5% + local$399
Kentucky1.25%$2886% "Motor Vehicle
Usage Tax"
Louisiana0.10%$235% + local$200
Maine 2.40%$5545.5%$499
Maryland0.00%$06% "Titling Tax"$300
Massachusetts 2.25%$5196.25%$395
Missouri1.92%$4434.225% + local$199
1.44%$3315.5% + city rate
OR county rate
(if no city tax)
Nevada1.72%$3986.85% + local$499
New Hampshire 1.80%$4150%$372
New Jersey0.00%$06.875%$399
New Mexico0.00%$03% "Motor Vehicle Excise"$339
New York0.00%$04% + local$75
North Carolina1.31%$3023% "Highway Use"$599
North Dakota0.00%$05% "Motor Vehicle Excise"$299
Ohio 0.00%$05.75% + local$250
0.00%$03.25% "excise tax"
for new vehicles
$20 on first $1,500
+ 3.25% on balance
7% for Allegheny County
8% for City of Philadelphia
Rhode Island4.77%$1,1007%$220
South Carolina2.37%$5465% ($500 max)$350
South Dakota0.00%$04% “motor vehicle excise"$129
Tennessee0.00%$07% + local rate on first
$1600 + 2.75% single
article tax on second
$1600 (to $3200)
Texas 0.00%$06.25%$150
0.00%$04.70% + local$299

4.19%$9664.15% ($75 minimum)$599
0.00%$06.5% + local + 0.3%
"motor vehicle sales/
lease tax"
West Virginia1.70%$3926%$175
0.00%$05% + county$229
Wyoming1.80%$4154% + county$500
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Ongoing Operating Costs

Apart from fueling, you will also need to consider parking and maintenance fees.

Since you’ll be traveling around the country doing business, visiting friends, or just exploring places, you’ll have to deal with parking fees.

Below is a table of average maintenance, auto insurance, and annual gas costs.

Alaska $341$1,077$730
Arizona $362$963$888
Arkansas $361$813$1,055
California $390$906$940
Connecticut $385$1,058$929
Delaware $314$1,110$967
Florida $377$1,124$1,015
Georgia $385$927$1,096
Hawaii $370$906$869
Idaho $349$664$988
Indiana $329$709$1,162
Iowa $315$630$998
Kansas $352$764$991
Louisiana $354$1,277$924
Maine $328$682$1,109
Maryland $388$1,030$951
Massachusetts $358$984$827
Michigan $317$1,064$994
Minnesota $346$782$1,033
Mississippi $356$901$1,231
Missouri $353$780$1,099
Nebraska $347$709$1,025
Nevada $364$1,078$771
New Hampshire $328$767$975
New Jersey $393$1,244$783
New Mexico $345$895$1,131
New York $365$1,196$713
North Carolina $390$708$1,032
North Dakota $344$662$1,207
Ohio $328$698$947
Oklahoma $338$839$1,175
Oregon $380$807$893
Rhode Island $371$1,142$800
South Carolina $368$860$958
South Dakota $312$654$1,056
Tennessee $353$762$1,021
Texas $364$1,001$860
Utah $371$810$918
Vermont $270$730$1,178
Virginia $382$758$964
Washington $375$910$866
West Virginia $310$975$1,033
Wisconsin $329$658$1,031
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With so many cars available today, parking spaces’ demand is high, explaining why parking fees are high.

As you use or drive your car every day, it will need regular maintenance to stay in good working condition and serve you well for a long time.

Always check the air conditioning unit, tires, engine, and other parts of your car to see if they need repairs or cleaning.

You may also want to take the car to your local mechanics for professional checks.

Note: As vehicle price declines as it gets older, the price of maintenance goes up. A vehicle that is less than 4 years old has minimal repair bills. In comparison, a car over 8 to 10 years old can have $1,000 annual repair expenses. This is one of the primary reason Honda and Toyota vehicles are popular. They retain a high value, and the maintenance costs are lower compared to other vehicles.

To stay safe, it is advisable to buy a car with a longer warranty or guarantee to protect against huge service or repair bills in the future and go for a model that will be less expensive to maintain.

Unlike other car manufacturers, Toyota offers capped price servicing to help you reduce the burden of servicing your car.

Car Insurance

After buying your new car, one of the most expensive vehicles ownership elements you’ll have to deal with is comprehensive insurance.

Comprehensive coverage is meant to protect your car against damages that may come about due to perils not related to a collision or accident.

Note: If you are buying a new car, this won’t apply. One way to find additional savings is for you to take on more risk. As illustrated in the chart above, if your vehicle is less than the bank’s amount of cash, then buy liability insurance or minimum coverage.

These include theft, vandalism, fire, falling objects, natural disasters such as a tornado, and civil disturbance like riots.

Insurance companies offer different comprehensive car insurance quotes depending on the car owner’s age, marital status, driving record, type of car to be insured, and the car’s condition.

Be sure to get insurance companies quotes and compare rates no matter where you live. 

Resale Value

The last thing you need is a car that loses its value too quickly or is worth a fraction of its original price when it comes time to sell.

In fact, depreciation can cost you more, even over fuel and maintenance combined.

Note: As illustrated by the chart, you can see a $25,000 vehicle loses 5K in value in one year. If you have a loan for $25,000, you are probably “underwater” at this point. The best time to buy a vehicle is when it is 2 to 5 years old, depending on the type, etc. For example, the same $25,000 car can be bought for $12,500 when 4 years old. This is particularly important since vehicles are made well now. The bonus to you is substantial savings.

So, you have to consider a car’s resale value when buying one.

Some companies have memberships in place that will guarantee your resale or trade-in value, such as Toyota Access, so make sure you investigate all offers available to you.

Editorial Guidelines: We are a free online resource for anyone interested in learning more about auto insurance. Our goal is to be an objective, third-party resource for everything auto insurance related. We update our site regularly, and all content is reviewed by auto insurance experts.