How Much Will Your Next Car Really Cost You?
When you buy your next car, will you know if you're really getting the best deal?
You might pat yourself on the back for negotiating a great price -- and if you did, you should. But no matter how much of a discount the dealer gives you, the purchase price is just the beginning of what it costs to own a car.
Depreciation, insurance, and maintenance costs all factor in to what the car will really end up costing you over the time you own it -- and those can vary widely between competing models. But is there any way to estimate all of that in advance?
A few experts have taken a stab at it -- and their results are quite interesting.
Finding Your Next Car's Total Cost of Ownership
For a few years now, Edmunds and Kelley Blue Book have each offered free services that estimate the "total cost of ownership" of a car over time. The data they offer is quite extensive -- for instance, Edmunds' system estimates everything from the car's repair costs to the taxes you'll owe over the first five years of your ownership.
These are useful tools to try if you find yourself stuck trying to decide between two competing models. But for those just beginning to shop, wading through the mass of numbers offered by these tools can be daunting.
Hoping to help consumers cut to the chase, Kelley Blue Book just announced its first "Total Cost of Ownership Awards." Kelley mined its own data to find and honor the current vehicles (and brands) with the lowest projected ownership costs over the first five years after purchase.
Some of the winners might surprise you.
And the Champions Are ...
Topping the brand list was Korea's Kia Motors, a corporate cousin of Hyundai that is a relatively new presence on U.S. shores. But Kia's offerings have been catching on recently, thanks to dramatic designs and good-value pricing -- and apparently, says Kelley, that value continues to show up long after your purchase.
Among luxury brands, Audi was tops, said Kelley's analysts. That was a bit of a surprise, since it's Toyota's (TM) Lexus brand that has the reputation for no-drama ownership, but Kelley cited Audi's low depreciation and high fuel-economy ratings as key contributors to the brand's winning status.
Digging down into specific classes of vehicles produced a few more surprises. General Motors' (GM) oft-maligned Chevy Volt triumphed over the Nissan Leaf in the "Electric Car" category, thanks to "slightly lower maintenance and insurance costs," the reviewers said. And the top three hybrid cars were all Hondas (HMC), according to Kelley, triumphing over offerings from Toyota and Ford (F) thanks to very low rates of depreciation -- though Ford's Escape won the title for best hybrid SUV.
Finally, maybe there's something to that cheeky Chevy Super Bowl ad after all. Ford complained mightily after the ad -- a silly romp through a post-apocalyptic cityscape -- suggested that its trucks weren't tough enough to survive the Apocalypse. But GM held its ground, with officials insisting that Chevy pickups were in fact more "dependable" and "long-lasting" than the Blue Oval's. Kelley's reviewers seem inclined to agree, at least when it comes to cost: The Chevy Silverado took the honors in their ratings.
At the time of publication, Motley Fool contributor John Rosevear owned shares of Ford and General Motors. The Motley Fool owns shares of Ford. Motley Fool newsletter services have recommended buying shares of Ford and General Motors, as well as creating a synthetic long position in Ford.
Get info on stocks mentioned in this article:
