While new car ads and TV commercials focus on fuel efficiency as their selling point, a surprising number of other factors strongly affect how much it costs to drive a car, a fact from which the term "Cost Per Mile" has evolved. The savvy shopper will recognize the importance of weighing these often overlooked expenses when buying a new car. Every new vehicle is subject to ownership expenses including registration, depreciation, and interest; there are also operating expenses including fuel, maintenance, tires, and repair. The sum of these expenses is the price we pay to drive each mile.
A shopper is comparing two similar cars, a 2008 Toyota Camry Base Sedan (MSRP: $19,970 with a fuel efficiency rating of 21 mpg city/31 mpg highway) and a 2008 Chrysler Sebring Sedan (MSRP: $19,840 with a fuel efficiency rating of 21 mpg city/30 mpg highway). To the shopper's eye, both cars are well-built and comparably equipped. Looking deeper, the man discovers that the Camry earned a five star rating and the Sebring a three star rating in resale value by the Automotive Lease Guide (ALG); the Toyota Camry will sell for a higher price at trade-in than the Sebring. Ka-Ching!
When comparing the 2008 BMW 328i (18 mpg city/28 mpg highway with an MSRP of $30,085) to the 2008 Mercury Sable (18 city/28 highway with an MSRP of $23,540), the BMW will lose $21,000 of its resale value over 5 years while the Sable loses $14,000. The Mercury Sable won the 2008 SmartChoice Award for Lowest Maintenance Costs. The cost of insuring a 328i will be $4000 more than on the Sable over 5 years.
Owning an economy compact like the Chevrolet Aveo can lower your cost of driving below that of even the most fuel efficient hybrid when you consider its price. If your transportation demands are not very robust, the money you save on the cost of the Aveo (MSRP $12,170) over the Prius (MSRP $21,500) pays for your gas for five years.
Thinking about depreciation can be depressing when you buy a new car. The minute you drive your new car off the lot, its value drops precipitously. Automatically deduct 15-20% off the purchase price if you were to turn right around and trade that vehicle back in on another new car. But you want a new car. New car shoppers now have the convenience of consulting popular automotive websites which publish total cost of ownership information. They can perform comparisons similar to those we have just illustrated to weigh the facts. Fuel efficiency ratings are on our minds due to the media, but a smart buyer can compare some of these other costs before deciding on a car, to really lower the cost of driving a new car.
