White BMW M2 speeds down highway
Are you in the market for a new car? Well, the good news is that prices are finally starting to come down. Dealerships are now well-stocked, and with supply and demand leveling out, transaction prices are dipping below MSRPs. However, owning a car still requires deep pockets.
When it comes to finding the best value in a vehicle, there are several factors to consider. You want a car that is affordable to own over time, taking into account depreciation, financing rates, insurance premiums, fuel economy, and maintenance and repair costs. It’s important to look beyond the initial price tag and consider the long-term costs.
The AAA’s annual Your Driving Costs report estimates that in 2023, the average new vehicle will cost owners $12,182 per year or $1,015 per month to drive 15,000 miles. This is a significant increase compared to last year’s average of $10,728.
One factor contributing to higher ownership costs is the rising price of new vehicles. Loaded-up SUVs and pickup trucks, which are popular among consumers, come with a hefty price tag. According to Kelley Blue Book, the average transaction price of a new vehicle in August was $48,451.
In addition to the high cost of buying a new car, other factors such as insurance premiums and fuel costs can add to the overall expense. Quadrant Information Services reports that the average yearly car insurance premium for a full coverage policy is now $2,014. Fuel costs, while currently lower than before, still average $3.70 for regular-grade and $4.51 for premium. These costs can quickly add up, especially for vehicles with low fuel efficiency.
When it comes to financing a new car, interest rates have also increased. Auto loan rates are currently averaging around 7%, compared to 3.8% at the beginning of 2022. It’s important to shop around and compare rates among different lenders to get the best deal.
If you’re considering buying a used car, it’s worth noting that resale values are expected to decrease, resulting in more depreciation. The AAA predicts that the average new vehicle will depreciate by $4,358 per year over a five-year ownership period, a 24% increase from last year.
So, which types of vehicles are the most expensive to own? Full-size pickup trucks top the list. Not only are they among the most expensive vehicles on the market, with prices exceeding $60,000, but they also have the highest average yearly ownership cost of $15,858, or about $1.00 per mile. On the other hand, small cars are the cheapest to own over a five-year period, with an annual average cost of $8,939.
Not surprisingly, the AAA determined that big pickup trucks are the costliest vehicles to own, at an … [+]
Electric cars and hybrids offer an alternative for those looking to save on ownership costs. The average annual cost for an electric car is $10,112, while a gas/electric hybrid comes in at $9,650. These costs are comparable to those of compact gas-powered crossovers and are lower than midsize SUVs.
For a detailed breakdown of annual ownership costs for different vehicle categories, including mileage options, you can refer to the AAA’s Your Ownership Costs data sheet here.
Denial of responsibility! Vigour Times is an automatic aggregator of Global media. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, and all materials to their authors. For any complaint, please reach us at – [email protected]. We will take necessary action within 24 hours.
