Annual cost of car ownership as reported by AAA: $9,369

[dud]

unless you own a hyper-depreciating vehicle I find it very hard to believe theat the annual cost of car ownership is even close to $9,369 as reported by AAA in this article:

Clark Howard: New car today can be cheaper than used one


Do you agree or disagree? If you do not agree then please chime in with your perspective. My estimate, based upon owning three (3) vehicles and owning them 10 years each is closer to $4K each.

 

[sdifox]

err, are they changing timing belt, water pump and the whole transmission every year?

And why would a new car cost less to maintain?

 

[Vette73]

That $9,369 takes into account somewhat hidden costs such as insurance, maintenance, interest on a car note, depreciation and other factors.


Could be higher depending on insurance, depreciation, etc...

 

[InflatableBuddha]

That does seem pretty high. There are obvious costs (fuel, maintenance - parts and labour), and depreciation if you own a new vehicle.

He did include insurance as part of the cost, but he didn't mention parking, which is a significant expense for many people (especially if you regularly park in a downtown core).

Most estimates I've seen put the amount at $3000-4000/year.

 

[vi edit]

The $4000 estimate sounds a lot more accurate to me.

My wife's Malibu loan is less than $200 a month. That's $2400 a year. She drives about 12,000 miles a year at an average of about 25MPG. There's another $1300. Plates run $78 a year. Insurance is about $400 a year. Throw in 3 oil changes and a rotation for another $100.

That's around $4300. No way is it losing another 5 grand a year in depreciation and out of pocket repairs.

 

[sdifox]

If we are including depreciation in the calculation, it would make buying new stupid expensive.

 

[imported_Imp]

If your insurance is extremely high due to age and accidents, and you bought well outside your means, then it looks reasonable.

 

[Lean L]

makes sense for new cars, in which case he number is actually low

 

[ItTheCow]

91 Honda Civic:

Insurance: $400 /yr
Gas: ~$500 /yr
Maintenance: ~$200 /yr
Registration/DMV Stuff: ~$50 /yr
Depreciation: ~$0 (It's already worth pretty close to nothing)
-----------------------
Total: $1150 /yr

 

[MotF Bane]

Try half that number.

 

[Mermaidman]

Hmm . . . for me:

Gas: 12K miles/yr @ 21MPG @$3/Gallon=~$1700
Insurance: $600
Tires: $800/4 yr=$200
Routine maintenance: $250
Car tax, registration fee, emissions/safety inspection=$230
Subtotal: ~$3000

Other major costs:
Depreciation=?
Unexpected repairs=?
Interest from car loan, or if you paid cash, then potential lost income from not investing that cash.

Minor costs: Car washes, parking, satellite radio, fuzzy dice, Type-R sticker

 

[Ronstang]

Originally posted by: sdifox
If we are including depreciation in the calculation, it would make buying new stupid expensive.

Buying new is stupid. It is better to buy a 2 year old car with 20K or so on the odometer and let someone else eat the huge depreciation of the first 2 years.

 

[Fenixgoon]

Originally posted by: Ronstang

Originally posted by: sdifox
If we are including depreciation in the calculation, it would make buying new stupid expensive.

Buying new is stupid. It is better to buy a 2 year old car with 20K or so on the odometer and let someone else eat the huge depreciation of the first 2 years.

buying new isn't bad if you want to be the only owner.

 

[redgtxdi]

And with current (and upcoming) incentives growing ever better, new may clearly be the better way to go if you're buying one of the top selling middle-income type vehicles today.

 

[sdifox]

Originally posted by: Fenixgoon

Originally posted by: Ronstang

Originally posted by: sdifox
If we are including depreciation in the calculation, it would make buying new stupid expensive.

Buying new is stupid. It is better to buy a 2 year old car with 20K or so on the odometer and let someone else eat the huge depreciation of the first 2 years.

buying new isn't bad if you want to be the only owner.

The article's argument is that buying new is better because of the price, but then references annual ownership cost from AAA including depreciation...

That does not compute.

 

[Slew Foot]

Originally posted by: Ronstang

Originally posted by: sdifox
If we are including depreciation in the calculation, it would make buying new stupid expensive.

Buying new is stupid. It is better to buy a 2 year old car with 20K or so on the odometer and let someone else eat the huge depreciation of the first 2 years.

I bought my 2008 TL-S for less than they were asking for a used 2007. End of year clearance deals can make new a lifesaver, especially for cars that dont depreciate much.

 

[Fenixgoon]

Originally posted by: sdifox

Originally posted by: Fenixgoon

Originally posted by: Ronstang

Originally posted by: sdifox
If we are including depreciation in the calculation, it would make buying new stupid expensive.

Buying new is stupid. It is better to buy a 2 year old car with 20K or so on the odometer and let someone else eat the huge depreciation of the first 2 years.

buying new isn't bad if you want to be the only owner.

The article's argument is that buying new is better because of the price, but then references annual ownership cost from AAA including depreciation...

That does not compute.

honestly, it doesn't make sense to include depreciation if you intend on keeping the car for its entire life. if you want to resell, then it matters

 

[sdifox]

Originally posted by: Fenixgoon

Originally posted by: sdifox

Originally posted by: Fenixgoon

Originally posted by: Ronstang

Originally posted by: sdifox
If we are including depreciation in the calculation, it would make buying new stupid expensive.

Buying new is stupid. It is better to buy a 2 year old car with 20K or so on the odometer and let someone else eat the huge depreciation of the first 2 years.

buying new isn't bad if you want to be the only owner.

The article's argument is that buying new is better because of the price, but then references annual ownership cost from AAA including depreciation...

That does not compute.

honestly, it doesn't make sense to include depreciation if you intend on keeping the car for its entire life. if you want to resell, then it matters

We were commenting on that 9369 number brandished about and whether it includes depreciation. Essentially, the argument the author put forth doesn't hold water.

 

[Gillbot]

Originally posted by: Imp
If your insurance is extremely high due to age and accidents, and you bought well outside your means, then it looks reasonable.

it REALLY depends on the car and your expenses since not everyone has super cheap insurance. Not to mention, that is likely an average so comparing it to this and that, of course there will be differences.

When I was a younger driver, my insurance was nearly $4k/year alone so $9k/year isn't unreasonable including the car, fuel and maintenance.

 

[dug777]

Our RAC here does something similar, plenty of detail behind assumptions and cost breakdowns etc as well:

http://rac.com.au/Motoring/Mot...car/Running-costs.aspx

Suggests between about $6.5k AUD (about $5.2k USD currently) for a Yaris/Jazz (Fit)/Getz, about $8.5k ($6.8k USD)for a Focus or Mazda3, and up to about $12k AUD ($9.6k USD) for a Holden Commodore V6 of Toyota Aurion V6 (large family saloon).

 

[Kaido]

I like leasing. My work beater was $1000 down, $206 a month. So first year expenses:

Down payment: $1000
Monthly: $206 x 12 = $2472
Insurance: $172 (2 people) x 12 = $2064
Gas: $50 a week (two tanks) x 52 = $2600
New wiper blades every 4 months: $100 total

Total: $8236
Total years 2 & 3 each: $7236

Wow, I came in to debunk that, but I guess that's actually pretty close :Q And that lease isn't even for a fancy car, just a run-of-the-mill sedan...

 

[SparkyJJO]

Originally posted by: ItTheCow
91 Honda Civic:

Insurance: $400 /yr
Gas: ~$500 /yr
Maintenance: ~$200 /yr
Registration/DMV Stuff: ~$50 /yr
Depreciation: ~$0 (It's already worth pretty close to nothing)
-----------------------
Total: $1150 /yr

I'm sure you could find some dumb kid to buy it from you

 

[Jumpem]

For me:

Car payment: $500 *12
Insurance: $71.82*12
Registration: $25
Oil Changes: $30 * 5
Gas: 33000 miles / 35mpg * $2.75 = $2593
Swapping all-season and snow tires: $50 * 2

Total: $9,729


Soon to change to:

Car payment: $608*12
Insurance: $77*12
Registration: $25
Oil Changes: $30 * 5
30k maintenance: $400
Gas: 33000 miles / 29mpg * $2.75 = $3129
Swapping all-season and snow tires: $50 * 2

Total: $12,024

 

[thomsbrain]

For the Accord, I'd estimate I spend per year:

$4250 on gas
$800 on insurance
$1200 on maintenance
$400 on tires
$3000 on depreciation (conservative)
$100 misc.
$300 registration

That's over $10,000 right there, and it wouldn't surprise me if the true figure is significantly higher. On a brand new car, it would be way more.

 

[sjwaste]

Originally posted by: Fenixgoon

Originally posted by: sdifox

Originally posted by: Fenixgoon

Originally posted by: Ronstang

Originally posted by: sdifox
If we are including depreciation in the calculation, it would make buying new stupid expensive.

Buying new is stupid. It is better to buy a 2 year old car with 20K or so on the odometer and let someone else eat the huge depreciation of the first 2 years.

buying new isn't bad if you want to be the only owner.

The article's argument is that buying new is better because of the price, but then references annual ownership cost from AAA including depreciation...

That does not compute.

honestly, it doesn't make sense to include depreciation if you intend on keeping the car for its entire life. if you want to resell, then it matters

Its "entire life" is generally defined by its market value, though. A rusted through hunk that doesn't run is probably worth as close as it gets to $0, but is worth some margin more if it at least ran. Even if you keep the car its entire life, its value is still defined at each point-in-time over that lifespan by its market value.

It might matter LESS if you drive it into the ground, but how many people actually drive the car for its entire (lot to scrapheap) useful life? Probably very few.