Small Cars and the Sticker Price do not Alone Contribute to the Total Cost of Ownership

Unemployment and inflation rates have brought the sales of trucks and sport utility vehicles and the fuel-efficient smaller cars, a range of costs, like the depreciation, maintenance, taxes and insurance started commanding the auto sales.

A bit of researching for a less expensive-to-drive car requires focusing on your options. Your budget, fuel efficiency of the car, depreciation/the resale value, safety and reliability would tip the scales in your favor. However, not all the vehicles fulfill your wish list. One feature or the other will have to be done without. Some cars are fuel-efficient, some aren’t; some hold their value well, others do not do it well. Consider a period of time and at the end of which the vehicles should cost much less in relation to the other cars say over a term of five to six years.

Let us look at a few features that would bring the total cost of the vehicle to the owner at the end of say, 5 years:

  • Small cars: Small cars can be the least expensive car over a five-year period but tend to have higher rates of injury and collision and have more insurance claims for repair

According to the Insurance Institute for Highway Safety:

  • Small cars are less safe than bigger vehicles
  • People are more likely to be injured in them when they crash
  • Small cars also tend to get into more crashes

Depreciation: Depreciation is critical and can be as high as 60% of the cost of ownership occurs in the first year of its purchase. It takes the lion’s share in annual ownership cost for vehicles up to six years old, according to Consumer Reports.

The following Big Cars cost Low over the long term

  • The Toyota Yaris: The Toyota Yaris costs $11,550. It has an estimated combined 31 mpg as reported by Environmental Protection Agency (EPA) The cost of owning the Toyota Yaris over five-year is modest $33,831, only three times the purchase price. The Toyota Yaris adds up to a fuel costing 30% of the long-term costs. The bad news is, the Toyota Yaris depreciates at a rate of 73%–the fastest of any car
  • Toyota Prius hybrid: Toyota Prius hybrid’s fuel consumption is as low as 17.9% of the five-year costs. Toyota Prius hybrid also depreciates quickly at less than half the rate of the Yaris. In the markets of hybrids only the latest and newest technology rules the roost and it is hard to find takers for the Preowned Toyota Prius hybrid cars
  • Cadillac DTS luxury sedan: Cadillac DTS luxury sedan cost around $43,175. The cost of fueling a Cadillac` DTS luxury sedan is the highest. That would boost the five-year cost of ownership of the Cadillac DTS luxury sedan to $69,663. The car’s depreciation rate is among the lowest on the list, at 38%. Its insurance is only 10% of the total cost, far less than those of the Yaris and the Prius.
  • Jeep Patriot: Jeep Patriot costs MSRP $4,000 lower than the Toyota Prius. The Jeep Patriot is more fuel-efficient SUVs on the road with a combined EPA of 24 mpg. This reduces its fuel costs. Jeep Patriot has one of the lowest maintenance and repair costs of any vehicle. The insurance costs are also among the lowest on the list. But the Jeep is not great on depreciation.

Because all such factors play a key role in reducing the cost of a vehicle, a car buyer should be wary about their individual needs. It makes no sense in buying a cheap-to-drive small car if your family is large. Do thorough researches to understand how these costs work for you in the long run, reducing the expense of the car.

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