Jump to content
  • Greetings Guest!

    CheersandGears.com was founded in 2001 and is one of the oldest continuously operating automotive forums out there.  Come see why we have users who visit nearly every day for the past 16+ years. Signup is fast and free, or you can opt for a premium subscription to view the site ad-free.

Sign in to follow this  
William Maley

Industry News: AAA: Costs of New Cars Total An Average of $8,500 Per Year

Recommended Posts


There are more expenses to owning a new car aside from making a monthly payment. You have gas, maintenance, repairs, and depreciation to worry about. The total cost according to a new study from AAA will depend on the type of vehicle you're driving.

AAA's Your Driving Costs study reports that average cost to own and operate a new vehicle in 2017 is $8,469 per year - $706 per month. The study looked at 45 new vehicles from the 2017 model year and evaluated the various costs such as gas and maintenance, but not insurance and monthly payment. When broken down into individual segments, small sedans are the cheapest ($6,354 annually) and trucks are the most expensive ($10,054).

This year's Your Driving Costs study saw hybrid and electric vehicles being separated for the first time. EV's are just under the average with an annual cost of $8,439, But EVs have horrendous depreciation - losing $5,704 on average per year.

“Although electric vehicles can have higher up-front costs, lower fuel and maintenance costs make them a surprisingly affordable choice in the long run. For even lower costs, car shoppers can avoid high depreciation costs by selecting a used electric vehicle,” said John Nielsen, AAA’s managing director of Automotive Engineering and Repair in a statement. 

Source: AAA
Press Release is on Page 2


AAA Reveals True Cost of Vehicle Ownership

  • Average new vehicle will cost nearly $8,500 annually to own and operate

Owning and operating a new vehicle in 2017 will cost a driver an average of $8,469 annually, or $706 each month, according to a new study from AAA. The annual evaluation of driving costs reveals that small sedans are the least expensive vehicles to drive at $6,354 annually, however small SUVs ($7,606), hybrids ($7,687) and electric vehicles ($8,439) all offer lower-than-average driving costs to U.S. drivers. Conversely, of the nine categories included in the evaluation, pickup trucks are the most expensive vehicles to drive at $10,054 annually.

 “Determining the cost of a new vehicle car is more than calculating a monthly payment,” cautioned John Nielsen, AAA’s managing director of Automotive Engineering and Repair. “While sales price is certainly a factor, depreciation, maintenance, repair and fuel costs should be equally important considerations for anyone in the market for a new vehicle.”

In addition to analyzing the ownership costs for sedans, SUVs and minivans, AAA’s Your Driving Costs study added four new vehicle segments in 2017 – small SUVs, pickup trucks, hybrids and electric vehicles.

Vehicle Type   Annual Cost*

  • Small Sedan: $6,354            
  • Small SUV: $7,606            
  • Hybrid: $7,687            
  • Medium Sedan: $8,171            
  • Electric Vehicle: $8,439
  • Large Sedan: $9,399
  • Medium SUV: $9,451
  • Pickup Truck: $10,054
  • Average: $8,469

*Based on 15,000 miles driven annually

To estimate the overall cost to own and operate a new vehicle, AAA evaluated 45 2017 model-year vehicles across nine categories and focused on mid-range, top-selling vehicles. AAA’s annual driving cost is based on a sales-weighted average of the individual costs for all of the vehicle types. Key findings include:

Depreciation

Depreciation — the declining value of a vehicle over time — is the biggest, and most often overlooked, expense associated with purchasing a new car. New vehicles lose an average of $15,000 in value during the first five years of ownership. In 2017, small sedans ($2,114) and small SUVs ($2,840) have the lowest annual depreciation costs, while minivans ($3,839) and electric vehicles ($5,704) are at the high end of the scale.

Maintenance and repair

To calculate annual maintenance and repair costs, AAA examined factory-recommended maintenance, replacement tires, extended warranty costs and services associated with typical wear-and-tear. New vehicles, on average, will cost a driver $1,186 per year to maintain and repair.

The inevitable costs associated with maintenance and repair should be an important consideration for car shoppers, as a recent AAA survey found that one-third of U.S. drivers could not afford an unexpected repair bill. AAA Approved Auto Repair facilities offer free vehicle inspections, AAA member discounts and a 24-month/24,000-mile warranty for AAA members. Visit AAA.com/AutoRepair to find a nearby facility.

Fuel

Fuel costs vary significantly by vehicle type, ranging from 3.68 cents per mile (electric vehicles) to 13.88 cents per mile (pickup trucks). New vehicle owners, on average, will spend just over 10 cents per mile – about $1,500 annually — to fuel their vehicles.

For gasoline-powered vehicles, AAA recommends selecting a TOP TIER gasoline, as its independent research found it to keep engines 19 times cleaner, improving vehicle performance and fuel economy. AAA cautions drivers that using premium-grade gasoline in a vehicle that does not specifically require it is an unnecessary expense.

Electric Vehicles

New to the Your Driving Costs study in 2017, AAA found that electric vehicles have lower-than-average driving costs at $8,439 per year. Without a gasoline engine to maintain, electric vehicles have the lowest annual maintenance and repair costs, at $982 per year. By relying on electricity instead of gasoline, fuel costs are also significantly lower than average, at under four cents per mile. Depreciation, however, is currently extremely high for these vehicles, losing an average of nearly $6,000 in value every year.

A recent AAA survey revealed that 1-in-6 Americans are likely to choose an electric vehicle, the majority motivated by their lower long-term ownership costs.

“Although electric vehicles can have higher up-front costs, lower fuel and maintenance costs make them a surprisingly affordable choice in the long run,” said Nielsen. “For even lower costs, car shoppers can avoid high depreciation costs by selecting a used electric vehicle.”


View full article

Share this post


Link to post
Share on other sites

this is good advertising for car-sharing.

it never fails to surprise me how so many people finance more car than they need and completely neglect the running costs. 

Share this post


Link to post
Share on other sites
1 hour ago, FAPTurbo said:

this is good advertising for car-sharing.

it never fails to surprise me how so many people finance more car than they need and completely neglect the running costs. 

Also nails home buying a OEM certified Lease return auto or buying an older one and then fixing it up the way you want. So many ways to have a nice ride for much less cost.

Share this post


Link to post
Share on other sites

Your content will need to be approved by a moderator

Guest
You are commenting as a guest. If you have an account, please sign in.
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Sign in to follow this  

  • Who's Online   2 Members, 0 Anonymous, 16 Guests (See full list)



  • Similar Content

    • By William Maley
      Volkswagen's Chattanooga, TN plant will soon have two more vehicles rolling off the line.
      Hinrich Woebcken, VW's North American CEO told Autocar that the upcoming I.D. Buzz and Crozz EVs for the region will be built at Chattanooga.
      “For strong product momentum, they need to be produced in the USA. It’s not possible to come into a high-volume scenario with imported cars. We want to localise electric mobility in the US,” said Woebcken.
      Woebcken also revealed that the models would be 'Americanized'.
      Source: Autocar

      View full article
    • By William Maley
      Volkswagen's Chattanooga, TN plant will soon have two more vehicles rolling off the line.
      Hinrich Woebcken, VW's North American CEO told Autocar that the upcoming I.D. Buzz and Crozz EVs for the region will be built at Chattanooga.
      “For strong product momentum, they need to be produced in the USA. It’s not possible to come into a high-volume scenario with imported cars. We want to localise electric mobility in the US,” said Woebcken.
      Woebcken also revealed that the models would be 'Americanized'.
      Source: Autocar
    • By William Maley
      Like many countries, China offers various incentives to spur the sales of electric vehicles. But a report from Bloomberg says the Chinese government is considering reducing various subsidies beginning next year. 
      According to sources, the government is considering cutting the average incentive by more than a third from where they currently stand. Also up for consideration is incentives being eligible on models that can travel at least 200 kilometers (about 125 miles) on a single charge. Why? The government wants automakers to keep innovating by making EVs cheaper and go much further on a charge.
      “China is switching away from carrots. The government wants to ensure automakers will launch models that would be appealing to consumers hence setting subsidies contingent on minimum driving range requirements,” said Ali Izadi-Najafabadi, an analyst at Bloomberg NEF.
      In 2017, the Chinese government spent 6.64 billion yuan (about a billion dollars) on various subsidies for electric vehicles. But this year saw the government begin to cut various incentives. For example, cars that have a driving range of less than 300 kilometers (about 186 miles) saw their incentives reduced. 
      “Government policy has a huge impact over the new-energy vehicle sector and every adjustment made on the policy front over the next two years will result in tremendous changes in the industry,” Li Yixiu, sales chief for Beijing Electric Vehicle Company earlier this month.
      "We believe there isn’t a chance for carmakers to raise prices to make up for the reduction of government fundings. Instead, we have to come up with competitive new products and services to respond.”
      Source: Bloomberg

      View full article
    • By William Maley
      Like many countries, China offers various incentives to spur the sales of electric vehicles. But a report from Bloomberg says the Chinese government is considering reducing various subsidies beginning next year. 
      According to sources, the government is considering cutting the average incentive by more than a third from where they currently stand. Also up for consideration is incentives being eligible on models that can travel at least 200 kilometers (about 125 miles) on a single charge. Why? The government wants automakers to keep innovating by making EVs cheaper and go much further on a charge.
      “China is switching away from carrots. The government wants to ensure automakers will launch models that would be appealing to consumers hence setting subsidies contingent on minimum driving range requirements,” said Ali Izadi-Najafabadi, an analyst at Bloomberg NEF.
      In 2017, the Chinese government spent 6.64 billion yuan (about a billion dollars) on various subsidies for electric vehicles. But this year saw the government begin to cut various incentives. For example, cars that have a driving range of less than 300 kilometers (about 186 miles) saw their incentives reduced. 
      “Government policy has a huge impact over the new-energy vehicle sector and every adjustment made on the policy front over the next two years will result in tremendous changes in the industry,” Li Yixiu, sales chief for Beijing Electric Vehicle Company earlier this month.
      "We believe there isn’t a chance for carmakers to raise prices to make up for the reduction of government fundings. Instead, we have to come up with competitive new products and services to respond.”
      Source: Bloomberg
    • By William Maley
      One of the key materials used in electric car batteries is cobalt. But there are growing concerns that the supply of cobalt is getting scarce as more and more automakers begin building electric cars.
      A new report from Bloomberg New Energy Finance says cobalt shortages are expected to happen earlier than previously forecast. This issue possibly brings a big challenge to the rollout of electric vehicles over the next five to seven years.
      "The long lead time to bring on new mines and the concentration of cobalt reserves in the Democratic Republic of the Congo mean there is a real possibility of supply shocks in the early 2020s," analysts from BNEF wrote.
      "If capacity does not grow as planned, cobalt prices could continue to spike and there could be a major cobalt shortage. This would have serious implications on the electric vehicle market."
      The price of cobalt has tripled within the past two years as more automakers begin building electric vehicles. Peter Deneen, the managing director at consultancy EV-Metals Resources Group said in an email that the market price for cobalt has risen in the "prospect of supply constraints". But the price doesn't include the potential risk of political upheaval in the Democratic Republic of the Congo - accounts for more than two-thirds of mined cobalt.
      Concerns have automakers accelerating development of batteries that have smaller amounts of cobalt. Chinese automaker BYD is expected to introduce batteries that have a nickel-manganese-cobalt ratio of 8:1:1 by the end of this year. BMW is expected to follow in 2021 with a similar ratio. According to BNEF's report, this chemistry will account for 57 percent of EV batteries by 2030.
      There is also the idea of recycling batteries that could provide 100,000 metric tons of cobalt a year by 2030. But the amount would have to mean all batteries from consumer electronics are recycled. Currently, the recycling rates around between 25 to 50 percent according to the report.
      Source: Bloomberg via Automotive News (Subscription Required)

      View full article
  • My Clubs

  • Recently Browsing

    No registered users viewing this page.

  • Reader Rides

About us

CheersandGears.com - Founded 2001

We ♥ Cars

Get in touch

Follow us

Recent tweets

facebook

×

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.