Filed under: Car Buying, Earnings/Financials
It’s easy to get wrapped up in certain aspects of a new car, like its speed, agility or looks while ignoring more pragmatic things like cost of ownership or residual values. The 2013 AAA Your Driving Costs report, though, indicates that these more mundane aspects of car ownership may be what are leaving us so darn broke each month.
For example, the study, which is recapped by The Wall Street Journal, indicates that driving 15,000 miles per year in a typical family sedan like a Toyota Camry or Ford Fusion will cost its owner over $9,000 per year, which is split between common costs like gas and maintenance and not so obvious things like depreciation and registration costs (among other things). That’s a lot of money, but it’s worse if you drive an SUV – that’s $11,600 per year, according to AAA.
How do you trim those costs, though? According to AAA, being smart about your purchase is the first step. For example, buying a size down could save you about $2K a year if driven for 15,000 miles each year. "In the showroom it might be a $5,000 difference, but in the long term it’s a five-figure difference," said Michael Calkins, the manager of technical services for AAA.
Calkins’ other bit of advice, though, is a bit tougher to swallow – don’t buy a new vehicle. Citing the depreciation hit taken by new cars in the first year of ownership, Calkins recommends sampling the used market. There are a number of reasons we might argue against this point, not least of which is that there’s no way of knowing what sort of driver the previous owner was or how well they maintained the car during its first few years on the road.
The other two cost-saving strategies are more obvious. First, AAA recommends reading the owner’s manual in order to figure out the right maintenance schedule. Changing your oil every three months or 3,000 miles, especially on a newer car, just isn’t as necessary as it may have been in past years. The other recommendation is to ask about insurance costs before buying a new car.
"You’d think that a subcompact economy car would be really cheap to insure, but that’s not necessarily always the case," Calkins told WSJ. "Conversely, with an expensive car, say, a Mercedes, the cost may actually be fairly reasonable because the people who own those cars tend to drive them very carefully."
Hop over to The Wall Street Journal for the full story on the AAA report.
How much does your car really cost? originally appeared on Autoblog on Sun, 23 Mar 2014 17:15:00 EST. Please see our terms for use of feeds.
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