A quick Google search will reveal a startling statistic regarding car expenses: the average new car monthly payment is north of $500 per month.

We love our cars here in the United States. We have a wide variety of reasons for loving cars, from needing a truck to haul home improvement supplies, to two-door sports cars for a weekend getaway. There is a lot to like about cars, but they have their drawbacks.

In budgeting, I’ve found it important to identify and highlight high-cost items each month. Before I started budgeting, I was shelling out nearly $300 per month on the loan for my 2010 Ford Taurus SHO. You can read about that car debacle here. Owning new or newer cars can be extremely expensive. But getting into a more affordable car that you still enjoy doesn’t have to be out of reach.

Transportation costs account for a large chunk of most of our monthly expenses. There are probably four main items that contribute to this total cost annually: loans, maintenance, insurance, and depreciation. That last one is an item you may not think about often, but let me explain.

Car loans are brutal, in most cases. Although there are some smoking 0% APR deals out there from time to time (we’ll soon find out that depreciation still makes these a dumb decision), most loans come with an interest rate ranging from 3 or 4 percent all the way up past 10 to even 15% sometimes. I’d consider lending at that rate to be predatory, but that is for another discussion. Interest is a killer. Say you take out a $30,000 loan at a 4% rate for 72 months, somewhat normal loan terms. During the course of you paying off that loan, you will have paid out an extra $3,794 in interest. Interestingly enough, you could buy a decent used car for that interest amount alone.

During that time that you had the loan out on this example $30k car, you drove it around an average amount, putting a standard amount of miles on it. You kept it in good shape, but when you go to check out the value of your car after those six years of ownership, you also find that your car has lost a lot of its value. Your car is now only getting offers from people willing to pay about $9,500 for your used vehicle. Your car has lost over two-thirds of its initial value, and let’s not forget that you didn’t just pay $30,000 for it, you paid $33,794 in total for it! That’s a big loss.

Loan costs and depreciation aside, new cars generally call for higher insurance rates. Since the insurance company is providing insurance on a higher value item, rates reflect that higher value. Instead of paying $50 or less per month for insurance on a car that is a few years old, your premiums could be $100-150 per month or more. That cost stretched out over a year or more really begins to add up.

The last item here, maintenance, is maybe the most interesting. There seems to be a general school of thought that says that older cars, or higher mileage cars, always have higher maintenance costs than new cars. Perhaps I’ve had incredibly good luck, but this has not been my experience. Here is a quick rundown on the cars I’ve had in the decade or so I’ve been behind the wheel:

1995 Buick LeSabre – 229,000 miles

1999 Ford Mustang V6 – 155,000 miles

1998 Buick LeSabre – 145,000 miles

2010 Ford Taurus SHO – 76,000 miles (this is the outlier, the newest car I’ve ever had)

2004 Ford Mustang Mach 1 – 82,000 miles

1993 Mazda Miata – 84,000 miles

Both Buicks were incredibly reliable. In its old age, the ’95 had a transmission that was starting to show signs of getting older, but we sold it before it was truly an issue. It was not far from a quarter of a million miles! The ’98 is still owned by one of my best friends and it is still faithfully getting him around with almost 155k on the odometer. I believe shocks and struts have been the only parts replaced there.

Two Mustangs, both of which never gave me any trouble. Ford’s aren’t even generally thought to be all that reliable in older models, yet all I ever did for either car was replace tires when needed and change the oil, as well as spark plugs.

Most recently, I drive a ’93 Miata with very low miles for the year. This is a 25-year-old car! Yikes!!! Would I trust it on a long road trip? The answer is a resounding yes. It runs like a top. I just took it on a 150-mile round trip this past weekend. When we moved to Oregon, it made the 570+ mile trip without breaking a sweat. The only maintenance on that? Had to replace the AC and serpentine belts for a little over $100. Now comes the interesting part.

The one car that was going to have an expensive repair was the 2010 Taurus. It started throwing engine codes, and from what I could tell, the catalytic converter was in the early stages of failing. I took it to a shop and they confirmed that before too long, it would need a new catalytic converter. For that car, I was quoted over $1,000 for parts and labor to replace it. I ended up selling it before the replacement was needed, but the moral of the story here is that the newest car I have ever owned would and could have cost me the most in maintenance. It’s not always the newest or lowest mileage cars that have the fewest or least expensive repairs. It can be quite the opposite in fact.

My advice is to find a vehicle that can provide for your needs, and do so reliably, without ballooning your transportation costs. Our 2008 Prius has been an excellent example of this. We paid cash for it, insurance is very reasonable, maintenance costs have been close to non-existent. Because we bought it after most of the depreciation had occurred, we won’t lose much at all once we decide to sell it.

In an ideal world, we’d all get to drive brand new cars, fresh off the lot. But for those of us working towards becoming debt free, cars can be a big hurdle in getting where we want to be. What are you driving now? Is it hurting your financial future? Maybe you drive an older car that you love. Continue enjoying it and watch the savings benefit the other aspects of your budget!