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Cost of car ownership rising

Led by an increase in maintenance costs, the money needed to own a car is going up, AAA says.

By Mitch Lipka Apr 18, 2013 5:32PM

Image: Frustrated woman driving car © Jose Luis Pelaez Inc/Blend Images/Getty ImagesOwning a car increased about 2% from last year and now costs more than $9,000 a year, according to the American Automobile Association.

That figure is based on driving the average sedan. It's quite a bit higher for drivers of SUVs ($11,559) and large sedans ($11,248). For owners of small sedans, the cost was less ($6.967).

The average was based on driving 15,000 miles a year and included such things as maintenance, fuel, insurance and tires. The cost per mile of driving the average sedan was about 61 cents, compared with a cost of 77 cents a mile for an SUV.

"Many factors go into the cost calculation of owning and operating a vehicle," said John Nielsen, AAA's director of automotive engineering and repair. "This year, changes in maintenance, fuel and insurance costs resulted in the increase to just over 60 cents a mile."

Here's how the costs broke down in the AAA study:

By far, the biggest increase was in the cost of maintenance, which rose more than 11% and accounted for 5 cents a mile for the typical sedan. Maintenance includes the cost of repairs and oil and other fluid changes, as well as spending on extended warranty policies. AAA said the cost of auto repairs rose considerably for certain models. (Another recent study, by CarMD, found a similar increase in auto repair costs.)

Fuel costs were up 2%, but that was based on the price of gas at the end of 2012. So consumers should be faring better now, with the most recent gasoline price survey by AAA showing a significant nationwide decline in prices at the pump. Still, fuel remains one of the biggest expenses for motorists, accounting for more than 14 cents a mile for the average sedan owner.

Another area of relative good news: The price of tires remained stable, the study found. Because tires are only a periodic expense for most drivers, they amounted to only about a penny per mile in expense for the typical motorist.

Overall, insurance rose about 3%, to just over $1,000 a year for the average low-risk driver with a good driving record. AAA noted, though, that insurance prices vary considerably by region, company, driver and driving record.

This is the 63rd year AAA has published its cost of driving study. The organization noted that gas was selling for 27 cents a gallon back then and operating a car cost about 9 cents a mile.


The AAA publishes the annual study as an aid for consumers.

Said AAA's Nielsen: "Before you make any vehicle purchase, it is important to determine ownership and operational costs and compare them to your current and future financial situation."

 

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6Comments
Apr 21, 2013 7:09PM
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cost of car ownership is rising because people are fooled by XXX per month instead of what it really costs..
Apr 19, 2013 7:04AM
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I commented on another board that my annual cost for the 2013 Honda Fit I bought in January for $18,000 should be about $4300/year if I drive the 15,000 used as a standard.

I keep my cars about 15 years so that's $1200/yr auto depreciation,  (15,000 miles/31 mpg) x $3.75/gallon = $1815 for gas, $1028 for insurance are the big items and they total $4043.

State vehicle registration is $128 every two years. The tires cost $300 to replace and should last 3 years - that's $100/yr depreciation and the 151R battery costs about $120 and should last 4 years, $30/year.  I need a synthetic oil change every 8-12 months, and that's $45/yr.  Now we're up to $4285.  The rest is replacement fluids.

If I missed anything -like road tolls if that's included- it's certainly nothing big enough to bring me from $4300 close to the $6967 listed in the article.  And since my actual driving is about 10,000 miles/yr, I can take $605 off the gasoline and my $4300 total is more like $3700.  That's a little over $10/day, very reasonable to me.
Apr 21, 2013 7:52PM
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I highly suggest diesel automobiles over gasoline models for several reasons, and the most affordable of cars with these engines come from Volkswagen. Here's why I say diesel wins the economical trophy.

1. Reliability - pure and simple the diesel engine has fewer moving parts, has a much thicker block due to compression ignition and is lubricated in part by the viscous nature of the fuel itself compared to gasoline. It has a much higher compression ratio than gasoline and leads to a cleaner burn (when you see one smoke it's having compression problems) which is easier on the exhaust system.

2.  Fuel Economy - A Diesel engine shines on the highway and the VW Jetta Sportwagen TDI currently holds the world record for average miles per gallon on a trip through all lower 48 states at a whopping 68 miles per gallon, if I recall. Yes, diesel fuel is often more expensive than gas, but if you're getting 50% more out of it it tends to be less of a concern. That being said a diesel is on par with an efficient gas engine in the city, so if you're not a highway driver the higher price of diesel would affect you.

3. Longevity - Not so long ago I saw a VW Rabbit Diesel still hopping around, the owner claimed it had over half a million miles on it, although the odometer had long ago ceased to function. This is not uncommon among diesel vehicles and especially if you do a lot of highway driving, like large trucks do, you can see over a million miles (as seen on some Class 8 truck engines.) Fleet trucks are more well maintained, on average, so an average diesel car will likely fall short of the million mile mark without overhaul...but I wouldn't rule it out!

4. Resale - Lets take the 2003 VW Jetta Wagon as an example of retaining value...because I owned one. I purchased it for $23k brand new and sold it last year for $12k in a private sale with 68k miles on it. The gas version of the same vehicle cold be sold in private for less than $9k, which is something to consider when you do the math for cost of ownership. 

The cost per year on my vehicle for depreciation was $1100 per year. My realized fuel expenses were about $650 a year (it goes up to $1400 using the 15k mile/yr standard @45mpg and $4 per gallon) and $800/yr auto insurance (clean record in Ohio) The additional fees will be similar to what the_mick mentioned as all vehicles need those services. So the grand total for the ownership of my 2003 VW Jetta Wagon TDI was roughly $3585. I had no major out of warranty repairs, just oil fluid and tires. I thought that car deserved a mention, as I was quite happy with the cost of ownership...I'm sure some of you have better tales, but that one is mine.
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