Unless you own a boat, chances are that your car is the biggest-ticket item you own after your house. It's a major expense that most people can't avoid, because unless you live in one of a handful of big cities with excellent public transportation or ridesharing services, you need your own car to get around.

Most Americans finance a car because few have the cash on hand needed to pay for such a major purchase. That payment -- which generally includes fairly significant interest -- is only part of what gets spent on car ownership each month.

In most cases, people also have insurance (a few states don't require it), maintenance costs, gas, and maybe a parking expense depending upon where you live. The numbers tend to pile up pretty quickly, but many people don't really consider the full cost when buying a car.

New cars at a dealership.

It's generally not cost effective to buy a new car. Image source: Getty Images.

What does the average American spend?

The average American spends $653 a month for car payments and car-related expenses, according to a survey of 2,000 U.S. adults done for The Zebra, an insurance comparison tool. That's a fairly hefty $7,836 per year to own a car and keep it on the road.

To put that into perspective, the average American makes $46,800 annually, according to Bureau of Labor Statistics data. That means car expenses eat up 17% of the average earner's total income.

Of course, it's possible to spend a lot less. It's actually probably smarter for most Americans to spend well below this number, but that requires making smart decisions.

How to save on a car

When you buy a car, it's important to balance affordability and reliability. It's almost never a good value to buy a new car, because cars depreciate by 20% the second you drive them off the lot. Imagine buying a stock that loses 20% in value guaranteed once you buy it, with a near guarantee it will be worth less as time goes on.

You want to be on the right side of the depreciation and, generally, that means buying a one-year-old car or maybe one slightly older. That's generally the sweet spot for getting something in good condition where someone else has taken the depreciation hit.

Before buying a car, you should also do your homework. Some vehicles have lower average repair needs and/or costs. Others cost more for even a simple oil change.

Use resources like Consumer Reports' annual used car buying guide to see the track record of the vehicle you plan to buy. Cars can be tricky, as traditionally reliable models may have the occasional bad year. You will also want to figure in gas mileage, since vehicles in the same class can vary greatly.

And, when it comes to getting a loan, not all loan sources are created equal. If you have excellent credit you will generally get better rates, but get offers before going to the dealer. Credit unions often offer a better deal than traditional financing options, and you're not required to use the dealer's financing (though some dealers may act like you are).

Consider a car a necessary expense, but do what you can to keep those costs in check. That's possible if you're willing to drive the best car for what you need rather than the coolest or newest vehicle you can only sort of afford.