http://www.AutoSaver.com by Kimberly Ann
What does it cost to drive a new car over the course of 5
years? Honestly, I’ve never really
broken it down or even considered the factors. I test drive the cars I like, I look at what
my car payment is going to be, what the miles per gallon are and that’s it. When you break it down, there is indeed much
more that should be considered. I was surprised
when I looked at Consumer Reports article “What That Car Really Costs To Own”. They determined their cost of ownership with
6 main factors and came up with a very intriguing list of what vehicles cost
per year to drive over a 5 year period.
The factors:
- Depreciation – The largest factor with the average model depreciating about 65% over the course of five years
- Fuel costs - this is the second-largest cost of vehicle ownership being 24% over five years. Using the national average of $4.00 per gallon and $4.20 for vehicles that require premium or diesel fuel..
- Interest - Accounts for about 11% of the five-year ownership costs and is based on the average of 6% interest rate with a five-year loan and a 15% down payment.
- Insurance – Accounts for 10% of ownership costs and this is one cost that definitely varie depending on many factors, including your age, location, and driving record.
- Maintenance and repairs – Accounts for 4% of ownership costs
- Sales tax – Accounts for about 4% as well and based on the national average of 5%
We can now combine these
costs into 2 groups. One being carrying
costs, which are the costs associated with the price of the car – depreciation,
interest and sales tax. The other group being
operating costs, which is what it costs to drive and maintain your vehicle –
fuel costs, insurance, maintenance and repairs.
Findings:
Carrying costs decrease
over time, while the operating costs increase. More than likely due to fuel costs rising, as well as increase in maintenance as your vehicle ages.
Even though maintenance and repair costs
increase, they still don't average one-sixth the cost of depreciation, even
after 8 years.
Some cars can be inexpensive to own initially but become relatively expensive to own as they age. Many new cars come with warranties, so once those expire, your costs would rise.
Some cars can be inexpensive to own initially but become relatively expensive to own as they age. Many new cars come with warranties, so once those expire, your costs would rise.
You can find their list of most and least
expensive new cars to own here:
Great information for new car buyers. Although I find this informative, interesting and it could
potentially save me money, I will still buy the vehicle I know I will enjoy
driving the most. Based on what I like, purchase price and gas mileage....Not to mention, I buy used vehicles. How about you?
http://www.AutoSaver.com
References:
Consumer’s report “What That Car Really Costs To Own”
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