Price of Driving Extends Well Beyond the Gas Tank
While gasoline prices are drawing new attention to the cost of driving, more and more consumer organizations are offering drivers help in calculating the total cost of their cars and urging them to consider the whole package when buying.
Insurance premiums, for example, vary not only by the value of the car but also by its safety record. Depreciation, the difference between what you paid for the car and what it’s worth when you sell it, is a direct loss. Then there’s the high cost of running a car with poor gas mileage and the price of repairs and maintenance.
“People don’t really necessarily budget all the costs that are really there,” said Steve Mazor, principal automotive engineer for the Automobile Club of Southern California.
According to the Auto Club, the average cost of driving a car in the United States in 2004 is 56.2 cents per mile, or $8,431 per year. Those numbers are slightly higher in California, where fuel, insurance and many repairs cost more than in many other states.
Fail to figure in those numbers, experts say, and you could wind up owning a car you can’t afford to drive.
“To not consider those other expenses will be counter to your best financial interest,” said Jeannine Fallon, spokeswoman for the automobile research firm Edmunds.com. “If you’re planning on figuring out how much the car will cost you every month, you can’t just take into account the financing.”
A number of companies and organizations, including the Auto Club, Edmunds.com and Intellichoice.com, offer tips on how to calculate the real cost of owning a particular car or truck. The Auto Club and Edmunds.com services are free.
The AAA guide is available at local Auto Club offices. It is updated annually, using regional average prices for fuel, insurance and depreciation. It includes a worksheet for calculating the cost of driving your car and tips on how to calculate the real cost of travel.
The Edmunds.com site is oriented more toward calculating the cost of owning and operating a vehicle before you buy it. It is updated monthly and includes calculations for the cost of fuel, insurance and other items based on ZIP Code.
In a nice localized touch, the site uses the typical selling price for any given model, rather than the manufacturer’s suggested retail price, when calculating the loss an owner can expect due to depreciation.
Using the Edmunds calculator, it is possible to punch in the model you are considering -- even down to the color, which affects the price -- and your ZIP Code, and the website will tell you how much it would cost to own the car over a five-year period.
It will even bring up a list of comparable models so you can see which cars in a particular class cost less to own.
To try it, go to the Edmunds.com home page, at www.Edmunds.com, and navigate to the link “True Ownership Costs.”
The results can be surprising. In several examples that I tried, a car that seemed cheaper to buy turned out to be more expensive once fuel mileage, insurance, depreciation and repairs were figured in.
For example, using my Studio City ZIP Code as a locator, I asked the site to analyze the purchase of a 2004 Honda Civic LX, four-door, with automatic transmission. I learned that the car typically sells for about $16,747 in my area, but costs $26,874 to own over five years. The site listed the depreciation and operating costs on the car as low, and said it costs about 36 cents per mile to drive, much less than the national average.
Through another link, the site displayed the selling cost, operating costs and total costs for a comparably equipped Toyota Corolla, Nissan Sentra, Ford Focus and Hyundai Elantra.
The Corolla cost more to buy and more to run, as did the Sentra and Elantra.
The Focus was cheaper to buy, and at first seemed like a better deal with a typical selling price of $14,312. But Edmunds calculated that the car would cost $32,505 to own and operate over five years -- more than any of the others in the comparison group.
By the end of the five-year period, the website said, the Focus would be worth $4,428; the Civic would be worth $7,426. Operating costs would be higher for the Focus than the Civic, also contributing to the difference in the total costs to own the two cars.
Even if you don’t go through the trouble of comparing the complete cost to own one vehicle versus another, it’s a good idea to at least do the math on how much a new car will cost to insure.
According to a recent survey by Cleveland-based Progressive Casualty Insurance Co., 30% of its customers who were new-car buyers didn’t know how much it cost to insure their vehicles -- even after they had signed up for coverage.
“We always recommend that when you’re out buying a car, look at things like insurance,” said Progressive spokesman Todd Morgano.
For example, he said, a 40-year-old single woman who lives in my Studio City ZIP Code and upgrades from that Honda Civic to a Cadillac Escalade SUV would pay about $126 more per year for insurance.
“The general rule of thumb is that if it’s more expensive, if it’s heavier, if it’s more likely to be stolen, it’s generally going to be priced higher for the insurance,” Morgano said.
