I always find it interesting when the SoCal AAA releases their yearly calculations on the cost to operate a new vehicle. I say that because if you believe the constant drumbeat of new car advertisements nowadays, one would think that it’s practically free. Or it is free because "Come in today and we’ll give you $3,000 cash back and financing at 0% for 6 years!" I gave up buying new cars years ago, as a 2-4 year old vehicle — especially one coming off a lease — is a complete steal.
I wonder if people consider that the $3,000 cash back they get immediately reduces the resale value of their vehicle going forward, and it also reduces the resale value of the same vehicle if you bought it last year and the cash back deals are still happening this year. Not to mention that financing a vehicle over 5-6 years will (more often than not) leave one upside down on resale value vs. payments owed in those last couple of years.
The AAA numbers are out again and they are not pretty. The net costs of fuel, tires and financing are taking their toll.
"The Automobile Club of Southern California’s 2008 edition of "Your Driving Costs" shows the cost of driving a passenger vehicle in the United States has increased 1.9 cents per mile in the last year and now averages 54.1 cents per mile.
While the cost of some driving expenses declined since the start of 2007, higher gasoline prices have more than offset these savings and pushed the overall cost of vehicle ownership and operation higher this year," said the Auto Club’s Automotive Research Center Manager Steve Mazor. In 2008, AAA estimates it will cost $8,121 to own and operate a new passenger car driven 15,000 miles per year. This compares to $7,823 per year in 2007; or 52.2 cents per mile.
Costs for maintenance, full-coverage insurance; and depreciation are all slightly lower this year. While costs for fuel, tires, financing, license, registration and taxes showed increases."
Costs range from $6,320 per year for a small sedan to $10,448 for a four-wheel-drive mid-size SUV. That’s some food for thought as oil pushes $120/barrel this week.
