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The Real Cost of Cars

Okay, so you’ve made all the right moves in planning your next car purchase. You’ve kept your current car at least 10 years—preferably 15. You’ve come up with two or three viable options of cars that don’t just look good, they also get good gas mileage and have good safety ratings.

You’ve done some comparison-shopping to see where you could get the best price. All set? Not quite. There’s more to consider, such as the projected cost of maintenance and repairs.

With some cars, even minor fender benders could lead to big repair bills. Low-speed crash tests conducted by the Insurance Institute for Highway Safety on 11 luxury cars led to repair bills ranging from $5,200 all the way up to a whopping $14,000.

One of the best online tools for figuring out how much cars really cost can be found at Edmunds.com. Its True Cost to Own calculator enables you to compare different vehicles based on the estimated cost of maintenance, repairs, fuel, and other factors.

Interested in a 2012 BMW 3 series sedan? You could probably buy one for about $13,500. However, according to the True Cost to Own calculator, its five year total cost is estimated at more than $42,000.

Willing to go for a 2012 Honda Accord sedan instead? It’ll cost you a couple thousand less to buy. However, over the course of five years, its True Cost to Own will be a lot less.

The Honda’s $16,000 lower cost to own is mostly due to its much lower maintenance and repair costs. A friend who owns a BMW tells me he spends over $100 just for an oil change!

The next time you’re in the market for a car, be sure to factor in all of the costs of ownership.

In our household, we own a 2004 Toyota Sienna and a 2010 Honda Accord. Both have been amazingly affordable to keep maintained. Earlier this year, when the Sienna developed a strange and costly problem with a driver’s door hinge, Toyota even reimbursed us for the more than $500 repair even though it was well beyond its warranty coverage period.

What type of car do you drive? Have you been happy or unhappy with how much it has cost to keep it maintained?

 

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5 Responses to The Real Cost of Cars

  1. Aaron August 10, 2017 at 2:01 PM #

    Yowser. We often don’t take the true cost of ownership into consideration (much like a home purchase).

    We just purchased a used Kia Soul and really like the car. I was surprised to see what the True Cost was from Edmunds. Eek.

    We’ve heard some good things about Kia’s so hoping it holds true for the life of er.

    • Matt Bell August 11, 2017 at 10:00 PM #

      There are a lot of factors that can impact things like maintenance and repairs, Aaron. Somehow, with a middle name like “Thrifty,” I think you’ll take good care of your Kia. 🙂

  2. John Fuhler August 8, 2017 at 1:57 PM #

    Hey Matt,
    I have always avoided spending money on cars because they are a depreciating asset. I look at the over all cost to own like you pointed out in your article. That is why I just bought a Chevy Bolt, EV (electric vehicle) I calculated the cost to run it. It comes out to about 3cents per mile. That is less than half the cost of a typical gasoline fueled car. Plus there is no oil to change. For maintenance costs; there is a cooling liquid for the battery system, rotating the tires and topping off windshield washer fluid. An electric car has many less moving parts than a gas powered car. There is only one gear to the transmission too. The IRS allows a $7,500 rebate on some electric cars. The Bolt is one of them. The other feel good part of this is that generating electricity puts less pollution into the atmosphere than burning diesel or gas. I think this is a better long term solution for transportation in many ways. (EPA rates the distance on a full charge at 238 miles, I have experience over 300, but I drive conservatively)

    • Matt Bell August 8, 2017 at 4:04 PM #

      John – Google Maps puts the distance between Chicago and Louisville at 296 miles. I think you should test your abilities by driving your Bolt down here to see us and trying to make it all the way on one charge!

      Seriously, though, 3 cents a mile is amazing. How long does the battery last? What does it cost to replace it? And how do you dispose of the old one?

      • John Fuhler August 11, 2017 at 4:48 PM #

        I like your challenge. I just might have to do that and come down to see you.

        The battery is warranted for 10 years or 100,000 miles. I don’t know the answers to your other questions. I suspect that by the time I need a new one that the technology will have advanced quite a bit from where it is now. Hopefully that will mean it will be much less costly to replace.

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