As the cost of new cars continues to rise, prospective buyers need to consider more than just the sticker price. Total ownership costs have surged in recent years, nearly doubling over the past decade. According to AAA’s annual report on driving costs, the additional expenses for a new car driven 15,000 miles a year now average $7,612 annually, excluding depreciation. This is a significant increase from $4,191 a decade ago.
Understanding Ownership Costs
Data from Edmunds reveals that the annual out-of-pocket expenses for new cars can vary widely, ranging between $29,247 to $36,404 over five years. To better understand the current costs of maintaining a new car, Business Insider analyzed the 2024 models of top-selling vehicles in the US, including the Ford F-150, Toyota Rav4, and Tesla Model Y.
Breakdown of Costs
- Ford F-150: Edmunds estimates that the additional costs for operating and maintaining an F-150 over the first five years amount to $36,400. This includes expenses such as gas, loan interest, insurance, maintenance, taxes, fees, and repairs. With the original sticker price of $48,100, the total cost over five years exceeds $85,000.
- Tesla Model Y: As the leading electric vehicle in the US, the Model Y incurs lower operating costs compared to the F-150. Edmunds projects an additional 5-year cost of $34,500 for the Model Y, making the total cost approximately $91,000, including the purchase price.
- Toyota Rav4: For both gas and hybrid models of the Rav4, Edmunds estimates total costs of approximately $29,300 over the first five years. While the hybrid variant may have higher insurance, maintenance, and repair expenses, it benefits from lower fuel costs. The total cost over five years, including the purchase price of around $35,000, is approximately $64,300.
Importance of Total Ownership Cost
When purchasing a new vehicle, it’s essential to consider the total cost of ownership, which can significantly impact your annual expenses. While the initial sticker price is a crucial factor, additional costs such as fuel, insurance, and maintenance expenses can add up substantially over time. Therefore, prospective buyers should carefully evaluate the long-term financial implications of owning a particular vehicle before making a purchase decision.
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