If you’re tooling around town in a four-wheel-drive SUV, you probably already know that you’re spending a heck of a lot more money on your car than your neighbor is spending on his or her small sedan.
But you may be surprised by just how much higher your costs of ownership and operation are: Nearly $5,000 a year more. And that figure is growing. It will cost almost $12,000 each year, on top of the purchase price and loan interest payments, to motor that SUV. To drive the sedan? Just shy of $7,000.
In the past year alone, the cost of driving climbed almost 2%, according to AAA’s annual “Your Driving Costs” study. The increase this year, to just over 60 cents a mile, is a result of changes in maintenance, fuel and insurance prices, says John Nielsen, AAA’s director of automotive engineering and repair. But that’s the average cost for sedans. For an SUV, it’s more than 77 cents a mile; for a small sedan, almost 45 cents.
The good news is that the 2013 increase is nearly the same as last year’s. In 2011, expenses rose more than 3%, on top of 2010’s near 5% jump.
Fuel costs are generally the wild card in these studies, but this year it was maintenance. Blame it on huge leaps in labor and parts prices for some models — think of how hard it was last year to find parts for some Japanese cars after the tsunami. In fact, maintenance costs saw their largest percentage increase ever, 11.3%. Buffeting that category further were what AAA called a “major increase” in the prices of extended-warranty policies — attributable in part to Hurricane Sandy and other natural disasters.
Insurance rates jumped about 3%, to $1,029 a year, but that’s for a low-risk driver with a clean driving record. Rates vary widely based on the driver and driving record, what insurance company you use, and where you live.
The sleeper costs could be depreciation. They inched up in this year’s study — AAA’s 63rd — less than 1% after a near-5% drop last year. Depreciation typically is among the biggest annual expenses of owning and operating a car, according to AAA, but in recent years, used cars have been holding their values because there are fewer of them on the road.
That’s changing as the economy improves and the natural alignment of used to new cars falls into its historical place. Wholesale used-car prices dipped in March on the Manheim Used Vehicle Value Index, compiled by the consulting and research arm of the industry’s leading wholesale auction company. The index now sits 4.6% lower than it did a year ago.
AAA found that fuel costs stayed relatively stable at an almost-2% rise, though prices at the pump actually increased nearly 4%. Why? Because cars are becoming more fuel-efficient.
Tire costs were unchanged, which AAA attributed to a leveling off of past leaps in the costs for raw materials, energy and transportation from factories to distributors nationwide.
Cost of owning and operating a vehicle, 2013:
- Small sedan: 46.4 cents a mile, $6,967 a year
- Medium sedan: 61 cents a mile, $9,151 a year
- Large sedan: 75 cents a mile, $11,248 a year
- 4WD SUV: 77.3 cents a mile, $11,599 a year
- Minivan: 65.3 cents a mile, $9,795 a year
NOTE: Based on driving 15,000 miles a year. SOURCE: AAA
[by Jennifer Waters, writing for MARKETWATCH]
NORM ‘n’ AL NOTE: We know we’ve mentioned this before, but this would be a good place to mention it again: You can cut your fuel costs to zero simply by participating in a nifty little gas card program called Gas Card Gifting.
As always, posted for your edification and enlightenment by
NORM ‘n’ AL, Minneapolis