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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
Illustration of a car blowing money out the exhaust
Illustration by Carlo Stanga
A less-expensive car can cost you more in the long run than a more-expensive alternative, our new ownership-costs comparisons have found.

At about $17,500, a Mitsubishi Lancer could cost $5,000 less than a Mini Cooper to drive home. But when you estimate the total costs of ownership for each car, the Lancer could cost you $3,000 more over five years. A Toyota Highlander can cost you $3,000 more to purchase than a Ford Explorer V6, but owning the Ford after five years can cost $6,500 more.

In addition to shopping for a good deal, car buyers should also consider how much a model will cost them to own. That includes depreciation, fuel costs, interest, insurance, sales tax, and maintenance and repair costs.

To help, Consumer Reports is introducing its new owner-costs estimates, which can help you compare models and could save you thousands of dollars. The "owner costs" Ratings cover one, three, five, and eight years of ownership and are based on a comparison of all models within the Consumer Reports database over eight years. Because depreciation is factored in our estimates, we assume that the vehicle will be traded in at the end of the term.


Pie chart for how ownership costs break down over five years
WHERE THE MONEY GOES  Here is how ownership costs break down over five years, based on our study of more than 300 vehicles.
In analyzing ownership costs based on 2007 data, we made some notable discoveries:

  • 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 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 Lincoln MKZ.

  • A little sports car can cost less to own than a family sedan. The Mazda Miata and Mazda6 V6 sell for about the same price. But at the end of five years, we estimate the Miata owner will be about $6,000 ahead.

  • The Toyota Prius is one of the few hybrids that can save you money. It costs about $7,500 more than a similarly sized Chevrolet Cobalt to buy but costs almost $2,000 less over five years.


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 of 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 $10,000 to fill up a Dodge Nitro over five years, while a similar-sized but more-efficient RAV4 V6 could save you $2,000 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 $3.00 a gallon for regular gas as of December 2007. For models that require premium or diesel fuel, we use these costs: $3.20 a gallon for premium, and $3.40 for diesel. On average, fuel is the second-largest cost of vehicle ownership, at 21 percent over five years.

Interest is tied directly to vehicle price, and accounts for about 12 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 6.86 percent as reported by Bankrate.com in December 2007.

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 the Mitsubishi Lancer Evolution. Insurance can run $2,500 a year or more based on our 2007 figures. Conversely, the similarly priced Acura TL can cost as little as $900 to insure over a year. Overall, insurance makes up about 11 percent of total ownership costs over five years. Costs are derived from data from the Insurance Institute for Highway Safety.

Maintenance and repair costs make up 4 percent of ownership costs over five years on average, according to data from 675,000 Consumer Reports subscribers who responded to the online version of our 2007 Annual Car Reliability Survey.

They gave us their estimated costs for the last year-excluding tires-and their responses provided data for more than 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 Range Rover is the most expensive vehicle to own for maintenance and repairs, costing about $2,000 in the fifth year alone. But the Toyota Land Cruiser is also luxurious and very capable off-road and costs only $600 in that year.

Sales tax costs owners about as much as maintenance and repair does. We use the national average of 4.83 percent in 2007.

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