Street Survival - Advanced Defensive Driving



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The purpose of this section is to provide practical tips on how to save on expenses in running your vehicle.

Any tips that you would like to share will be much appreciated. See Contact page.

? Questions:

🛈 Info:

Maintenance Economy

? What is car economy?

Car economy refers to the efficiency and cost-effectiveness of owning and operating a car. It encompasses various factors that impact the overall cost of owning and using a vehicle. Here are some aspects related to car economy:

  • Fuel Efficiency: One of the primary considerations for car economy is fuel efficiency, often measured in miles per gallon (MPG) or liters per 100 kilometers (L/100 km). A car with higher fuel efficiency consumes less fuel for the same distance traveled, resulting in lower fuel costs.

  • Maintenance and Repairs: The maintenance and repair costs of a vehicle can significantly impact its economy. Some cars may have higher maintenance costs due to expensive parts, specialized servicing requirements, or a lack of available mechanics. Research the reliability and long-term maintenance costs of the vehicle you're considering.

  • Insurance Costs: Insurance premiums vary based on factors such as the make and model of the car, its safety features, the driver's age and driving history, and the location. Compare insurance quotes from multiple providers to find the best rates and consider the impact on your overall car economy.

  • Depreciation: Depreciation is the decline in a vehicle's value over time. Cars generally lose value as they age and accumulate mileage. Some models retain their value better than others, which can affect the long-term car economy if you plan to sell or trade-in the vehicle.

  • Financing: If you're financing the car through a loan or lease, the interest rates and terms will impact the overall cost of ownership. Compare offers from different lenders and carefully consider the terms and conditions to find the most affordable financing option.

  • Taxes and Fees: Depending on your location, there may be various taxes and fees associated with car ownership, such as sales tax, registration fees, and annual vehicle taxes. Research the specific requirements in your area to understand the impact on your car economy.

  • Alternative Fuel Options: Electric vehicles (EVs) and hybrid cars offer alternatives to traditional gasoline-powered vehicles. Consider the availability and cost of charging infrastructure, incentives, and potential savings on fuel costs when evaluating the car economy of alternative fuel options.

  • Resale Value: Certain car models retain their value better than others, making them more cost-effective in the long run. Research the resale value of the vehicle you're considering to understand its potential impact on car economy.

  • Carpooling and Car-Sharing: If applicable, consider the possibility of carpooling or participating in car-sharing programs. Sharing the costs of owning and operating a vehicle with others can significantly reduce the financial burden and improve car economy.

  • Usage Patterns: Your individual driving habits and usage patterns can affect car economy. Factors such as the length and type of your daily commute, the frequency of long-distance travel, and driving style (aggressive or cautious) impact fuel consumption and maintenance requirements.

By considering these factors and conducting thorough research, you can make informed decisions that optimize the car economy and ensure that your vehicle aligns with your budget and financial goals.

How does depreciation affect my car’s value?

Depreciation is the decline in a car’s value over time, and it significantly affects your car's overall cost of ownership. Understanding how depreciation works can help you make informed decisions about buying, selling, and maintaining a vehicle. Here's an overview of how depreciation affects your car’s value and what factors influence it:

How Depreciation Affects Car Value

Initial Depreciation:

  • First-Year Drop: New cars typically lose a significant portion of their value as soon as they are driven off the lot. On average, a new car can lose about 20-30% of its value in the first year.

Annual Depreciation:

  • Steady Decline: After the initial drop, the car continues to depreciate at a slower but steady rate, typically losing about 15-20% of its value each year for the next several years.

Long-Term Depreciation:

  • Plateau: After about five years, the rate of depreciation slows down, and the car loses value more gradually. At this point, a car might have lost about 60% or more of its initial value.

Factors Influencing Depreciation

Make and Model:

  • Brand Reputation: Cars from manufacturers with a reputation for reliability and quality (e.g., Toyota, Honda) tend to depreciate more slowly.

  • Luxury vs. Economy: Luxury cars often depreciate faster due to higher initial costs and maintenance expenses.


  • Usage: Higher mileage reduces a car’s value more quickly. Average annual mileage is about 12,000-15,000 miles. Exceeding this can accelerate depreciation.


  • Maintenance: Well-maintained cars with regular servicing and no major repairs hold their value better.

  • Appearance: A clean, undamaged exterior and interior help maintain value.


  • Model Year: Newer models generally retain value better than older ones, but all cars lose value with age.

Market Demand:

  • Popularity: Cars that are in high demand (e.g., fuel-efficient vehicles) depreciate more slowly.

  • Market Trends: Changes in consumer preferences (e.g., shift towards SUVs) can impact depreciation rates.

Economic Factors:

  • Fuel Prices: Fluctuations in fuel prices can affect the desirability and value of certain vehicles.

  • New Model Releases: Introduction of new models or redesigns can make older models depreciate faster.

Mitigating Depreciation

Buy Used:

  • Pre-Owned Value: Purchasing a used car that is 2-3 years old can help you avoid the steepest initial depreciation.

Choose Wisely:

  • Research: Select cars known for their reliability and low depreciation rates.

  • Resale Value: Check resale value trends for different makes and models before buying.


  • Regular Service: Keep up with scheduled maintenance and repairs.

  • Documentation: Maintain detailed service records to prove the car has been well cared for.

Drive Conservatively:

  • Lower Mileage: Keep mileage within average limits to reduce wear and tear.

Protect the Car:

  • Parking: Park in safe areas to avoid damage.

  • Cleanliness: Regularly clean the interior and exterior.

Selling or Trading In


  • Market Conditions: Sell when demand for your type of car is high.

  • Age and Mileage: Aim to sell before major depreciation milestones (e.g., before 100,000 miles).


  • Detailing: Invest in a professional detailing before selling.

  • Repairs: Fix minor issues that could lower the car’s value.


Depreciation is an unavoidable part of car ownership, but understanding how it works and the factors that influence it can help you make smarter decisions. By choosing the right car, maintaining it well, and timing your sale strategically, you can minimize the impact of depreciation on your car's value.

? What is the total cost of ownership for a car?

The total cost of ownership (TCO) for a car includes all the expenses associated with purchasing and operating the vehicle over its lifetime. This typically encompasses several categories:

Purchase Price

  • New Car Price: The amount paid for a new vehicle.

  • Used Car Price: Generally lower than new cars, but may include higher maintenance costs.


  • Value Loss Over Time: The decrease in a car's value over time, usually highest in the first few years.

Financing Costs

  • Loan Interest: The interest paid on an auto loan.

  • Down Payment: Initial amount paid upfront.

  • Loan Term: The length of time over which the loan is repaid.


  • Premiums: Monthly or annual payments for car insurance.

  • Coverage Levels: Comprehensive, collision, liability, etc.

  • Deductibles: The amount paid out of pocket before insurance covers the rest.

Maintenance and Repairs

  • Routine Maintenance: Oil changes, tire rotations, brake pads, etc.

  • Unexpected Repairs: Issues like transmission problems, engine repairs, etc.

  • Extended Warranties: Additional coverage beyond the manufacturer’s warranty.

Fuel Costs

  • Fuel Efficiency: Miles per gallon (MPG) or miles per kilowatt-hour (for electric vehicles).

  • Fuel Prices: Varies by region and type of fuel (gasoline, diesel, electricity).

Registration and Taxes

  • Registration Fees: Annual or biannual fees required by your state or country.

  • Sales Tax: Tax paid on the purchase price of the car.

  • Property Tax: Some areas levy an annual tax on the value of the vehicle.

Licensing and Permits

  • Driver’s License Fees: Cost to obtain or renew a driver’s license.

  • Special Permits: Fees for specialized plates or permits (e.g., electric vehicle permits).

Parking and Tolls

  • Parking Fees: Costs for parking at home, work, or in public areas.

  • Toll Charges: Fees for using toll roads or bridges.

Other Costs

  • Accessories and Add-ons: Costs for aftermarket additions like roof racks, custom wheels, etc.

  • Emissions Testing: Required in some regions for vehicle compliance.

  • Cleaning and Detailing: Regular cleaning and occasional detailing to maintain the car's condition.

Example Calculation

Let's break down an example for a new car over five years:


  • Purchase Price: $25,000


  • Depreciation: $10,000 over five years (approx. $2,000 per year)


  • Down Payment: $5,000

  • Loan Amount: $20,000 at 4% interest over five years

  • Total Interest Paid: Approximately $2,100


  • Annual Premium: $1,200

  • Total for Five Years: $6,000

Maintenance and Repairs

  • Routine Maintenance: $500 per year

  • Total for Five Years: $2,500

  • Repairs: $1,000 over five years

Fuel Costs

  • Miles Driven Per Year: 12,000

  • Fuel Efficiency: 25 MPG

  • Fuel Price: $3 per gallon

  • Annual Fuel Cost: $1,440

  • Total for Five Years: $7,200

Registration and Taxes

  • Registration Fees: $100 per year

  • Total for Five Years: $500

  • Sales Tax: 8% of $25,000 = $2,000

Parking and Tolls

  • Parking: $50 per month

  • Total for Five Years: $3,000

  • Tolls: $20 per month

  • Total for Five Years: $1,200

Total Cost of Ownership Over Five Years

  • Purchase Price: $25,000

  • Depreciation: $10,000

  • Financing Costs: $2,100

  • Insurance: $6,000

  • Maintenance and Repairs: $3,500

  • Fuel Costs: $7,200

  • Registration and Taxes: $2,500

  • Parking and Tolls: $4,200

Total TCO: $60,500

This example illustrates how various factors contribute to the total cost of ownership. Adjustments can be made based on specific circumstances, such as driving habits, regional costs, and personal preferences.

🛈 Effective Cost vs Monthly Payment

When considering the cost of a vehicle, it's important to understand the difference between effective cost and monthly payment. Here's an explanation of both terms:

  • Effective Cost: The effective cost refers to the total cost of owning a vehicle over a specific period, taking into account various factors such as the purchase price, financing costs, depreciation, fuel expenses, insurance premiums, maintenance and repairs, taxes, and any other associated costs. It provides a comprehensive view of the financial impact of owning and operating a vehicle.

Calculating the effective cost involves estimating the total expenses you're likely to incur during the ownership period. This allows you to evaluate the long-term affordability and determine if a particular vehicle fits within your budget. It considers not only the monthly payment but also all other ongoing expenses related to the vehicle.

  • Monthly Payment: The monthly payment refers to the amount you pay each month towards the financing of your vehicle. It typically includes the principal loan amount plus interest and is spread over a specific loan term, usually 3 to 7 years.

The monthly payment is an essential consideration for many buyers as it directly impacts their monthly budget. However, it's crucial to remember that the monthly payment alone does not reflect the total cost of owning a vehicle. Other expenses like fuel, insurance, maintenance, and depreciation should also be taken into account.

While the monthly payment helps determine if you can afford the loan, the effective cost provides a more accurate representation of the overall financial commitment associated with owning a vehicle.

When comparing different vehicles or financing options, it's advisable to consider both the monthly payment and the effective cost. By doing so, you can make a more informed decision, ensuring that the monthly payment fits your budget while also considering the long-term affordability and overall cost of owning the vehicle.

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Street Survival - Advanced Defensive Driving