April 2008
Owner costs drop over time
Our ownership costs compare the expense of keeping a new car for one, three, five, and eight years.
Most people keep their new vehicles for three or five years. But the high depreciation costs in the first year help explain why new cars are so expensive to own, so we break that out as well. Depreciation is the biggest reason cars cost so much to own during the first few years. It makes up almost 60 percent of the cost in the first year, and depreciation is still the largest annual ownership cost for vehicles up to six years old. Sales tax also adds to the cost of the car the first year.
Cars cost less to own every year after that. For example, the average model in our study costs twice as much to own the first year as it does the second year. The sixth, seventh, and eighth years combined about equal the cost of the first year.
While maintenance and repair costs increase, even over eight years they still don't average one-sixth the cost of depreciation.
Still, we found that some cars can be inexpensive to own initially compared with others, then become relatively expensive as they age.
For example, maintenance and repair costs are very low for BMWs over the first five years of ownership, primarily because BMW offers free maintenance during the four-year warranty. In fact, our readers report that the BMW Z4 roadster is the least-expensive car to maintain over the first five years. But BMWs are some of the most expensive cars to maintain over the long term. Once the free maintenance period expires, the BMW X3 SUV, 3 Series sedan, X5, and 5 Series went from having near the lowest maintenance and repair costs in their categories to among the highest.
In the end, though, it is almost always less expensive to hang on to your current car than to buy a new one. Even the most-expensive repair bills for an old car can't outweigh the cost of depreciation on a new one.
While our data can't show exactly what you'd pay for a specific vehicle, it can help you approximate which new vehicles can be the best value in the long run.
Online subscribers can compare costs for one, three, five, and eight years of ownership from within the model pages. Find the model you want to research from the pull-down search tools and go to the "Prices & Costs" tab.
AVERAGE COST PER YEAR
Owner costs decrease significantly as cars age in most cases.
For the average vehicle, owner costs decrease significantly with age, largely because depreciation—the highest cost—diminishes significantly. Paying off the new-car loan also eliminates interest payments. Maintenance and repair costs rise as cars age, but not nearly as much as other costs fall.
Most people keep their new vehicles for three or five years. But the high depreciation costs in the first year help explain why new cars are so expensive to own, so we break that out as well. Depreciation is the biggest reason cars cost so much to own during the first few years. It makes up almost 60 percent of the cost in the first year, and depreciation is still the largest annual ownership cost for vehicles up to six years old. Sales tax also adds to the cost of the car the first year.
Cars cost less to own every year after that. For example, the average model in our study costs twice as much to own the first year as it does the second year. The sixth, seventh, and eighth years combined about equal the cost of the first year.
While maintenance and repair costs increase, even over eight years they still don't average one-sixth the cost of depreciation.
Still, we found that some cars can be inexpensive to own initially compared with others, then become relatively expensive as they age.
For example, maintenance and repair costs are very low for BMWs over the first five years of ownership, primarily because BMW offers free maintenance during the four-year warranty. In fact, our readers report that the BMW Z4 roadster is the least-expensive car to maintain over the first five years. But BMWs are some of the most expensive cars to maintain over the long term. Once the free maintenance period expires, the BMW X3 SUV, 3 Series sedan, X5, and 5 Series went from having near the lowest maintenance and repair costs in their categories to among the highest.
In the end, though, it is almost always less expensive to hang on to your current car than to buy a new one. Even the most-expensive repair bills for an old car can't outweigh the cost of depreciation on a new one.
While our data can't show exactly what you'd pay for a specific vehicle, it can help you approximate which new vehicles can be the best value in the long run.
Online subscribers can compare costs for one, three, five, and eight years of ownership from within the model pages. Find the model you want to research from the pull-down search tools and go to the "Prices & Costs" tab.
AVERAGE COST PER YEAR
Owner costs decrease significantly as cars age in most cases.
For the average vehicle, owner costs decrease significantly with age, largely because depreciation—the highest cost—diminishes significantly. Paying off the new-car loan also eliminates interest payments. Maintenance and repair costs rise as cars age, but not nearly as much as other costs fall.
