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The Cost of Owning a Car in California

Most people are aware of the higher cost-of-living in California, but few realize how the state’s premium pricing extends to car ownership. Simply put, owning a motor vehicle in California is not cheap when compared to the costs imposed on drivers in most other states. Those considering moving to California will likely need to recalibrate their budget to account for this increase in the cost of car ownership, the specifics of which are outlined below:

License and Registration

Of all the car-related expenses incurred by Californians, license and registration are actually one of the least-costly when compared to the national average. A title costs $18, vehicle registration is $46, and CA drivers license renewal good for five years is only $36. However, those coming from states where these fees are higher shouldn’t get too excited considering how other car-related expenses will make up the difference and then some.

Insurance Coverage

Californians pay about 20% more than the national average for their auto insurance. Ask any personal injury lawyer the reason why and they’ll tell you it’s because the roads in California are particularly congested. This results in a greater chance for vehicle collisions. Approximately 600 injuries are caused by bad driving in California every day, a figure which certainly contributes to the higher premiums imposed by insurers.

Tax Due

The sales tax in California is currently set at 7.25%, with additional local taxes tacking on as much as 2.5% more. For a new vehicle purchased for $36,113, this adds up to nearly $3,000. In lieu of a personal property tax, Californians pay an annual registration fee amounting to 0.65% of the vehicle value. For a new car bought at the aforementioned price of just over 36 grand, this fee would be $234.73 for the first year.

Fuel Price

Gasoline prices in California are notoriously high and have been for decades when compared to the national average. The current price for a gallon of gas in the Golden State is the highest paid in all 50 states. This is due to a whopping amount of taxes paid per gallon, which are an accumulation of federal and state taxes subject to state and local sales taxes. All added up, Californians currently pay $3.51 for regular, $3.65 for mid-grade, $3.76 for premium, and $3.86 for diesel per gallon.

Service and Maintenance

While not exceptionally high compared to the national average, the typical car repair in California will cost about $365.45 based on data from 2017. That means Californians driving early model road warriors with high mileage probably want to put aside one dollar every day for the inevitable repair. Keep in mind this price is only the average; service and maintenance for luxury vehicles, newer models, and other more high-valued makes and models will undoubtedly cost more.

California is not a cheap place to live, but most people moving to the Golden State are surprised to learn how far this extends beyond the rent they pay. Owning a car is also subject to these higher costs. In order to preserve and protect your personal finances, it’s imperative to take this into account before packing your bags.


Categories: California