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What that car really costs to own

Knowing a vehicle's cost over time can save you thousands in the long haul

Last updated: August 2012

Sometimes spending more up front on a car can cost you less in the long run. The trick is knowing when to invest.

It's comparatively easy to see which cars cost more to buy initially. But it's harder to know how much you'll get soaked in depreciation, insurance, maintenance and repair, and even fuel. Consumer Reports' owner-cost estimates bring to light all these hidden costs over 1, 3, 5, and 8 years of ownership.

And they contain some surprises. For example, a four-cylinder Mazda6 family sedan may seem like a good deal, at a price $1,900 less than a comparable Toyota Camry. But the total cost of owning the Mazda for five years is $2,000 higher than the Camry. Similarly, you'd save more than $5,000 over the long haul by buying a Toyota Highlander SUV, rather than a Dodge Journey that costs $1,600 less up front.

The factors included in our owner cost estimates are depreciation, fuel, interest on financing, insurance, sales tax, and average maintenance and repair costs you can't find anywhere else. Because depreciation is factored in our estimates, we assume that the vehicle will be traded in at the end of the term (after one, three, five, or eight years).  No matter how long you own your new car, checking out these estimates can save you thousands of dollars by the time you sell it.

Costs vary among similar models

Here are some other notable discoveries we made in our analysis:

  • Over the first five years of ownership, the median car costs more than $9,100 a year to own—about what it costs to own a midsized SUV such as the Nissan Murano or an upscale sedan such as the Lexus ES. But it's easy to find nice cars that cost much less. Sporty cars such as the base Mini Cooper can cost as little as $5,800 a year to own. Even a quick, refined, and roomy small SUV such as the V6-powered Toyota RAV4 costs as little as $7,800 a year to own.
  • Keeping a car for eight years, rather than five, can reduce median ownership costs significantly to just $7,800 a year on average. This is partially due to lower depreciation costs, and partly a result of keeping the car for a few years after the loan has been paid off.
    One of the least expensive cars to own in our estimation is the small Honda Fit, which costs just over $5,300 a year to own for five years. It combines a relatively low purchase price with low depreciation, great fuel economy, excellent reliability, and fairly low maintenance and repair costs.
  • Paying more for a hybrid can save you money—as long as you choose the right hybrid. Most mainstream hybrids that aren't luxury or SUV models cost less to own over five years than their less expensive conventional counterparts. (Two exceptions are the Chevrolet Volt and Honda Insight. It takes six or seven years, respectively, to make up the added purchase price in fuel savings for those cars.)
  • Large and luxury SUVs have the highest ownership costs by far, often amounting to more than $13,000 a year. Pickups of all kinds aren't far behind.
  • While Hyundai and Kia models have low prices and long warranties, the savings are often offset by poor resale values. Hyundai's Accent and Elantra don't prove any less expensive after five years than Honda's more expensive Fit and Civic.
  • Most Lexus models have relatively high maintenance and repair costs (primarily due to maintenance), despite their excellent reliability. The Lexus ES350 racks up an average of $2,300 in maintenance and repair in the first five years, about twice what you'd pay on a Buick LaCrosse.

Calculating the costs

Our cost of ownership Ratings comprise six main factors:

Depreciation is the largest cost factor by far. On average, it accounts for about 48 percent of total ownership costs over five years. Depreciation is a vehicle's loss in value over a defined period. To calculate it, we start with the price of a typically equipped model and factor in the discounts offered off the manufacturer's suggested retail price on some models. The average model depreciates about 65 percent over five years. Some vehicles depreciate faster than others because of oversupply, limited appeal, or rebates on similar new models. When we don't have depreciation data for a new model, we use estimates based on comparable vehicles.

Fuel costs can really add up, especially for SUVs. For example, you could pay more than $15,000 to fill up a Jeep Liberty over five years, while a similar-sized but more-efficient RAV4 V6 could save you $4,000 during that time. To calculate fuel costs, we assume the vehicles are driven 12,000 miles a year, the average reported by respondents to our annual survey. To that we apply the national average price of $4.00 a gallon for regular gas For models that require premium or diesel fuel, we use these costs: $4.20 a gallon for premium, and $4.30 for diesel. On average, fuel is the second-largest cost of vehicle ownership, at 24 percent over five years.

Interest is tied directly to vehicle price, and accounts for about 11 percent of five-year ownership costs. We calculate it based on a five-year loan, with a 15 percent down payment, because that is how many people buy cars. We use the average interest rate of 6.0 percent .

Insurance costs vary depending on many factors, including your age, location, and driving record. And they can dramatically boost the ownership costs of models that otherwise would seem affordable. For example, if you're looking for a fast car on a budget, steer clear of sports cars such as the Subaru Impreza WRX STi. Insurance can run three times as much as the fun and agile but cheaper to own Mini Cooper S. Overall, insurance makes up about 10 percent of total ownership costs over five years. Costs are derived from data from the Highway Loss Data Institute.

Maintenance and repair costs make up 4 percent of ownership costs over five years on average, according to data from Consumer Reports subscribers who responded to the online version of our Annual Car Reliability Survey.

They gave us their estimated costs for the past 12 months-excluding tires-and their responses provided data almost 300 models on vehicles up to eight years old. We used estimates based on similar models when data was unavailable. The majority of the costs are covered by the factory warranty during the first few years. But for some vehicles it can still add up. On average, we found that the Porsche Cayenne SUV is the most expensive vehicle to own for maintenance and repairs, costing more than $4,000 over the first five years. But the Toyota Land Cruiser is also luxurious and very capable off-road and costs just over half that.

Sales tax costs owners about as much as maintenance and repair does. We use the national average of 5.0 percent.

Carrying costs vs. operating costs

Costs can be divided into carrying costs (those tied to the vehicle purchase) and operating costs associated with ongoing driving expenses. Operating costs include fuel, insurance, and maintenance and repair costs. Depreciation, interest, and tax are carrying costs.

Carrying costs diminish significantly over time, while operating costs rise slightly, primarily due to increasing maintenance and repair costs. Still, on average, operating costs are less than carrying costs until a vehicle is about five years old.

Still, we found that some cars are expensive to drive, even though they're affordable to park in your garage. Some small cars, for example, have low prices, but their high insurance costs make them relatively expensive to operate. The Toyota Prius is one of the least-expensive cars to own in our estimation, and most of its costs go into insurance, gas, and maintenance. But small cars are the exception.

On average, carrying costs outweighed operating costs by 20 percent over the first five years for the average model we examined. For example, carrying costs for the BMW 750 Li add up to almost $17,000 a year. But it is relatively inexpensive to drive at just over $4,500 a year.

Even so, operating costs for some vehicles can be surprisingly high. The Cadillac Escalade, for example, costs about $5,300 a year on average for fuel, insurance, and maintenance and repair for the first 5 years.

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 five or eight 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 makes up almost 60 percent of the cost in the first year, and it 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 almost 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 subscriber survey reports that the BMW X3 is one of the least-expensive SUVs to maintain over the first five years, costing an average of just $279 a year. But BMWs are some of the most expensive cars to maintain over the long term. Once the free maintenance period expires, the X3  averages more than $1,100 a year in maintenance costs. The BMW 3 Series sedan also goes from having near the lowest maintenance and repair costs in its category to among the highest.

In the end, 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.

Most and least expensive to own

Lowest cost Highest cost
Make & Model Cost/year over 5 years Make & model Cost/year over 5 years
Small cars
Toyota Prius C $5,000 Mitsubishi Lancer ES $7,000
Toyota Corolla Base 5,250 Mazda3 Hatchback 7,000
Honda Fit (base) 5,250 Nissan Sentra 2.0 SL 7,000
Smart ForTwo 5,500 Ford Focus Hatchback 7,000
Honda Fit Sport 5,500 Kia Soul 7,000
Mazda2 (MT) 5,500 Kia Forte Hatchback 7,000
Scion xD (MT) 5,500 Kia Forte Koup 7,250
Toyota Yaris Hatchback 5,500 Chevrolet Cruze 1.4T 7,250
Scion xD (AT) 5,750 Suzuki SX4 Hatchback 7,500
Toyota Corolla LE 5,750 Chevrolet Cruze ECO 7,500
Family sedans
Toyota Camry Hybrid 6,500 Toyota Camry (V6) 8,250
Volkswagen Passat TDI 6,500 Ford Fusion (V6, FWD) 8,250
Toyota Camry (4-cyl.) 6,750 Chevrolet Impala (3.6) 8,250
Hyundai Sonata Hybrid 6,750 Nissan Altima (V6) 8,500
Hyundai Sonata (2.4) 6,750 Subaru Legacy 3.6R 8,500
Honda Accord (4-cyl.) 6,750 Chrysler 200 (V6) 8,500
Ford Fusion (4-cyl.) 7,000 Kia Optima 2.0T 8,750
Mazda6 (4-cyl.) 7,000 Ford Fusion (V6, AWD) 8,750
Nissan Altima (4-cyl.) 7,250 Mazda6 (V6) 9,000
Subaru Legacy 2.5i 7,250 Volkswagen Passat (V6) 9,250
Upscale & luxury cars
Lexus CT 200h 7,750 Lincoln MKS AWD 13,000
Buick Verano (2.4) 7,750 BMW 535i 13,250
Audi A3 2.0T 8,000 Mercedes-Benz E350 13,500
Buick Regal (2.4) 8,000 Jaguar XF 13,500
Acura TSX (4-cyl.) 8,250 Hyundai Equus 14,000
Buick Regal (turbo) 8,500 Lexus LS 460L 16,000
Buick LaCrosse eAssist 8,750 Jaguar XJL  19,000
Infiniti G25 Sedan 9,000 Audi A8 L 20,000
Toyota Avalon 9,000 Mercedes-Benz S550 20,500
Volkswagen CC 2.0T 9,000 BMW 750Li 21,500
Lowest cost Highest cost
Make & Model Cost/year over 5 years Make & model Cost/year over 5 years
Small SUVs
Toyota RAV4 (4-cyl.) $7,000 Subaru Forester 2.5XT (turbo) $8,250
Honda CR-V 7,250 Nissan Xterra 8,750
Nissan Juke 7,250 Mitsubishi Outlander (V6) 9,000
Mitsubishi Outlander (4-cyl.) 7,500 Kia Sportage (2.0T) 9,250
Hyundai Tucson (2.4) 7,500 Volkswagen Tiguan 9,750
Midsized SUVs
Hyundai Santa Fe (4-cyl.) 8,000 Dodge Journey V6) 10,750
Chevrolet Equinox (4-cyl.) 8,000 Nissan Pathfinder (V6) 10,750
GMC Terrain (4-cyl.) 8,000 Ford Explorer (V6) 11,250
Kia Sorento (4-cyl.) 8,250 Jeep Grand Cherokee (V6) 11,250
Jeep Liberty 8,500 Jeep Grand Cherokee (V8) 12,750
Large SUVs
Ford Flex (V6) 10,500 Dodge Durango (V8) 13,500
GMC Acadia 10,500 Ford Expedition 14,000
Chevrolet Traverse 10,500 Chevrolet Suburban 14,000
Ford Flex (EcoBoost, V6) 11,750 GMC Yukon XL 14,250
Dodge Durango (V6) 12,250 GMC Yukon (5.3) 15,000
Upscale/luxury SUVs
BMW X3 (3.0) 10,250 Mercedes-Benz ML350 14,250
Land Rover LR2 10,500 Land Rover LR4 14,250
Infiniti EX 10,500 Mercedes-Benz GL350 BlueTec 15,000
Audi Q5 3.2 11,250 Porsche Cayenne (V6) 15,250
Lexus RX 350 11,250 Infiniti QX56 15,500
Buick Enclave 11,250 Lincoln Navigator 15,750
Volvo XC60 11,500 Toyota Land Cruiser 16,000
Mercedes-Benz GLK350 11,500 Land Rover Range Rover Sport 16,250
Land Rover Range Rover Evoque 11,500 Mercedes-Benz GL450 16,500
Acura MDX 11,750 Cadillac Escalade (base) 17,250
Lowest cost Highest cost
Make & Model Cost/year over 5 years Make & model Cost/year over 5 years
Minivans & wagons
Toyota Prius V $6,000 BMW 328xi Wagon $10,000
Volkswagen Jetta Wagon TDI 6,250 Dodge Grand Caravan SXT 10,250
Volkswagen Jetta Wagon SE 7,500 Kia Sedona 10,500
Mazda5 7,750 Nissan Quest 10,500
Subaru Outback 2.5i 8,000 Chrysler Town & Country 10,750
Sporty cars & convertibles
Mini Cooper Hatchback Base 5,750 Lexus IS 250 Convertible 11,000
Honda CR-Z 6,000 Subaru Impreza STi 11,000
Fiat 500 Sport 6,000 Chevrolet Camaro Convertible SS 11,000
Volkswagen Beetle 2.5 6,500 Mitsubishi Lancer Evolution 11,250
Fiat 500 C 6,500 BMW 328i Convertible 11,750
Mini Cooper Hatchback S 6,500 Audi A5 2.0T 11,750
Scion tC 6,500 Infiniti G37 Convertible 11,750
Hyundai Veloster 6,750 Chevrolet Corvette Base 12,750
Kia Forte Sedan 6,750 Chevrolet Corvette Z06 14,500
Honda Civic Si 7,250 Jaguar XK 19,000
Pickup trucks
Toyota Tacoma (V6) 8,500 Chevrolet Avalanche 13,000
Chevrolet Colorado 9,250 Dodge Ram 2500 Turbodiesel 13,750
Nissan Frontier 9,250 Ford F-250 Turbodiesel 14,000
GMC Canyon 9,500 GMC Sierra 2500HD Turbodiesel 14,250
Honda Ridgeline 9,500 Chevrolet Silverado 2500HD Turbodiesel 14,250
   

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