To obtain the absolute best value on a new car or truck, experts agree that shoppers need to look beyond the sticker price to find a model that’s cheaper to own over the long haul. The AAA says motorists are spending an average 60.8 cents per mile or $9,122 per year, based on driving a typical midsize sedan 15,000 miles annually, which is 1.96 percent higher than it was a year ago. Multiply that amount by five years and that’s a total of $45,610 in operating expenses. Choosing a comparably priced model that costs 10 percent less to own could save a motorist around $4,560.
As they say, the devil is in the details, and shoppers can pocket significant savings over time by choosing a car or truck that best retains its resale value, gets top fuel economy, and costs the lowest to finance, insure, maintain and repair.
“New-car shoppers naturally want to know how much a car will cost upfront; however, sometimes an even more expensive car can actually save you money during the first five years of ownership,” says Dan Ingle, vice president of vehicle valuations for Kelley Blue Book (KBB) in Irvine, Calif.
To help consumers identify what will be the best longterm values, KBB recently released its annual Five-Year Cost to Own Awards in 22 separate vehicle classes. These are the models predicted to be the most affordable rides within their respective classes in terms of depreciation, fuel, insurance, financing, repair and maintenance costs and state sales taxes and registration fees over a five-year ownership period.
While import brands Lexus and Mazda were found to deliver the lowest average operating costs across their respective model lines, 13 out of the 22 models cited by KBB in fact come from domestic brands, with General Motors being given eight citations.
Among them, the diminutive Chevrolet Spark actually garnered two separate awards, one each for the conventionally powered version in the subcompact category and the all-electric Spark EV among plug-in vehicles. KBB says the latter beats other electrified models like the Chevrolet Volt and Honda Accord Plug-In Hybrid in virtually all ownership factors. Other noteworthy cost-saving cars on the list include the compact Toyota Corolla, midsize Honda Accord and full-size Chevrolet Impala sedans and the Jeep Patriot, Mitsubishi Outlander and Ford Explorer crossovers. Top sports car is the Ford Mustang, while the most frugal-to-own luxury car is the two-door Audi A5.
When considering long-term ownership costs, the richest of them is typically depreciation, or how well a given model holds its value over time, based on a variety of economic factors and historical data. According to KBB the typical new vehicle will retain only around 39.7 percent of its original value after five years on the road, which means the average new car that sells for $50,000 today would be worth around $19,850 after five years. By comparison, a similarly priced model that’s expected to retain an additional five percent of its original value after 60 months will put an extra $1,600 back into an owner’s pocket at trade-in time.
While an owner won’t realize any savings in depreciation for several years, picking a more fuel-efficient vehicle will put money back into one’s pocket literally from day one. Sometimes even choosing a higher mileage version of the same model can pay off. For example, at a combined 29 mpg city/highway the “eAssist” version of the full-size Chevrolet Impala will save an owner $650 annually in fuel costs over one that’s equipped with the available 3.6-liter V6 engine at 21 mpg, based on current gas prices and 40 percent highway/60 percent city driving at 15,000 miles/year. That’s a $3,250 difference after five years.
Insurance premiums are another long-term cost consideration, and while they’re based largely on a motorist’s driving record, age, gender, credit rating, address and miles driven, some vehicles tend to carry lower rates than others based on their claims histories and repair costs. Following that logic, it’s easy to see why minivans and crossover SUVs tend to garner the lowest rates, while high-performance sports cars and top-of-the-line luxury cars are assessed the costliest premiums.
© CTW Features
2014 vehicles with the lowest ownership costs
Subcompact Car: Chevrolet Spark
Compact Car: Toyota Corolla
Sporty Compact Car: Hyundai Veloster Turbo
Mid-Size Car: Honda Accord
Full-Size Car: Chevrolet Impala
Entry-Level Luxury Car: Buick Verano
Luxury Car: Audi A5
High-End Luxury Car: Lexus LS
Sports Car: Ford Mustang
High-Performance Car: Chevrolet Camaro Ss/Zl1
Hybrid/Alternative Energy Car: Toyota Prius c
Plug-In Vehicle: Chevrolet Spark EV
Compact SUV/Crossover: Jeep Patriot
Midsize SUV/Crossover: Mitsubishi Outlander
Full-Size SUV/Crossover: Ford Explorer
Luxury Compact SUV/Crossover: Buick Encore
Luxury Midsize SUV/Crossover: Lincoln MKX
Luxury Full-Size SUV/Crossover: Buick Enclave
Midsize Pickup Truck: Toyota Tacoma Regular Cab
Full-Size Pickup Truck: GMC Sierra 1500 Regular Cab
Minivan: Dodge Grand Caravan
Hybrid SUV/Crossover: Lexus RX
Source: Kelley Blue Book, Irvine, Calif.