What your vehicle is really costing you
January 18 2018
When shopping for a new vehicle, it's easy to get hung up on the sales price. But even if two cars are priced the same initially, it doesn't mean the total cost of car ownership will be the same as time goes on.
Vehicle Depreciation and Ongoing Costs
Depreciation -- the decline of vehicle value over time -- varies, as do out-of-pocket costs associated with fuel, maintenance, repair, state fees and insurance. To make the best choice long-term, all of these items must be taken into account. Consider the following findings from a recent AAA study:
- Owning and operating a new vehicle in 2017 cost an annual average of $8,469.
- New drivers can expect to pay an average of $1,186 in maintenance and repair costs.
- New vehicles depreciate by an average of $15,000 during the first five years of ownership.
Depreciation plays a significant role in overall value as illustrated by Kelley Blue Book's Annual 5-Year Cost to Own Awards. In 2017, Subaru took the Best Brand award, due in part to a stylish appeal that helps increase used-car values. Acura, another brand that holds value well, received the Best Luxury Brand award.
How You Can Keep Expenses Low
Opting for a used vehicle can help ward off depreciation costs, as can using your vehicle less. According to AAA, just staying on top of routine maintenance, such as oil changes and tire rotations, can help save an average of $100 per year.
Want to know how much your vehicle is costing you each month? Check out NerdWallet's Total Monthly Car Cost Calculator.