It's easy to get wrapped up in certain aspects of a new car, like its speed, agility or looks while ignoring more pragmatic things like cost of ownership or residual values. The 2013 AAA Your Driving Costs report, though, indicates that these more mundane aspects of car ownership may be what are leaving us so darn broke each month.

For example, the study, which is recapped by The Wall Street Journal, indicates that driving 15,000 miles per year in a typical family sedan like a Toyota Camry or Ford Fusion will cost its owner over $9,000 per year, which is split between common costs like gas and maintenance and not so obvious things like depreciation and registration costs (among other things). That's a lot of money, but it's worse if you drive an SUV - that's $11,600 per year, according to AAA.

How do you trim those costs, though? According to AAA, being smart about your purchase is the first step. For example, buying a size down could save you about $2K a year if driven for 15,000 miles each year. "In the showroom it might be a $5,000 difference, but in the long term it's a five-figure difference," said Michael Calkins, the manager of technical services for AAA.

Calkins' other bit of advice, though, is a bit tougher to swallow - don't buy a new vehicle. Citing the depreciation hit taken by new cars in the first year of ownership, Calkins recommends sampling the used market. There are a number of reasons we might argue against this point, not least of which is that there's no way of knowing what sort of driver the previous owner was or how well they maintained the car during its first few years on the road.

The other two cost-saving strategies are more obvious. First, AAA recommends reading the owner's manual in order to figure out the right maintenance schedule. Changing your oil every three months or 3,000 miles, especially on a newer car, just isn't as necessary as it may have been in past years. The other recommendation is to ask about insurance costs before buying a new car.

"You'd think that a subcompact economy car would be really cheap to insure, but that's not necessarily always the case," Calkins told WSJ. "Conversely, with an expensive car, say, a Mercedes, the cost may actually be fairly reasonable because the people who own those cars tend to drive them very carefully."

Hop over to The Wall Street Journal for the full story on the AAA report.


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  • 56 Comments
      csgill75
      • 9 Months Ago
      I may be one of the few people who always buys a new car but I keep them for at least 10+ years or they are driven into the ground. Some get passed down to the kids and then to other family members once me and my wife are done with them. Usually the last place one of our cars go to is the scrap yard if a charity organization doesn't want it.
        Edsel
        • 9 Months Ago
        @csgill75
        We are still operating two 10+ and a five year old vehicles we purchased new. Today's vehicles will last forever if properly maintained. Engineering and manufacturing technology has improved so much over the last 40 years that today's low budget midsize automobile surpasses a 1960's era Bentley.
      Pierre DeBois
      • 9 Months Ago
      I would add that used cars have become a better value over the years because cars are lasting longer - I still have a Focus from my days as a Ford engineer. I left Ford in 2001, and the car currently has 185,000 miles. Unless I am buying a vehicle or the experience - be it a Corvette with a pickup at the factory/museum or travel to Germany for a special order Audi, Benz, and Porsche - why not check out a used vehicle with a few miles on it? Take out the depreciation cost and have a vehicle that runs well. One of the best bi-product of the recent advances in automotive quality is that the vehicles use more durable material from the stiffen framework and smarter assembly as some mechanical systems are eliminated.
      oRenj9
      • 9 Months Ago
      "Calkins' other bit of advice, though, is a bit tougher to swallow - don't buy a new vehicle. Citing the depreciation hit taken by new cars in the first year of ownership" The prevalence of this "advice" is why so many people are paying more for a used vehicle than a new one. Dealerships are almost always asking more for a one-year-old car than the invoice price on them. Time your purchases right and always keep an eye out for incentives. Then you can be rocking a new car for less than a used one.
        icemilkcoffee
        • 9 Months Ago
        @oRenj9
        It's very true. 1-year old used cars are easily the worst deals on the car lots. Precisely because so many shoppers ask for them, without doing their homework. Actually cars don't really depreciate all that quickly in its first year. A lot of depreciation calculations are done with MSRP prices, instead of actual transaction prices. So take them with a huge grain of salt.
      Cruising
      • 9 Months Ago
      It's all about financial responsibility and preference, some used cars can cost as much as a newer model and vice versa. In some cases you can get a really nice compact/sub compact car for the price of a used midsize. I wanted to buy a used midsize but settled for a brand new compact instead because I wanted to spend less on gas and they are easy to maneuver and park. Surprisingly most compact cars these days feel as spacious as midsize cars from the 90s. I know my argument may be flawed because I'm talking about two complete separate classes of cars but that's just my opinion. I can still put down a big down payment and get my payments real low for a brand new car that fits my needs.
      bonehead
      • 9 Months Ago
      I recommend buying a used car from a responsible owner, that is of a relaible build. Toyota from a few years ago made spectacularly reliable cars. Case in point. In 2009 I purchased a Pontiac Vibe (made by toyota) for $5900 with 55k miles on it. It had no options. Manual trans, locks, windows, and no cruise. Drove the car to 115k miles only replacing oil and brake pads. Still had original clutch and showed no signs of slipping. I sold it for $5500 after 4 years. Cheapest car ive ever owned. I replaced it with another vibe (needed an auto due to a left foot injury). So i got a 2009 Vibe with no options and 22k miles for $10900. I fully expect to drive it trouble free for a while before wanting to sell it. Ill of course see more depreciation (last one was a luch issue with the economy tanking), but i fully expect to sell it for around $6-7k while its still under 100k miles. Then with the money i save i purchase a competely impractical older sports car (S2000) and have my cake while eating it too. Works great. (unfortunately wife could not be convinced of the same so we also have one of those stupidly expensive SUVs)
      RocketRed
      • 9 Months Ago
      "Depreciation" is important in buying a car for one reason only---if you are going to be owing more than the car is worth for a significant period of time. But if you are borrowing money for a consumer good on terms by which the bank has a security interest greater than the value of the good, you need to check your head. You've indentured yourself. Depreciation is just not a thing in buying a consumer good. You get what you pay for, which is the possession and use of a thing with a residual value, if any, of X as a function of time and condition at said time. Depreciation does not "hit" at some point after you drive off the lot. Resale value is well-reported and those data are widely used in pricing of cars, used and new. In any case, it is not a "cost" of owning a consumer good. That is a nonsensical concept. Counting depreciation as an expense is a construct of business accounting with particular analytical purposes, which are not relevant to this context. You do not "expense" the deprecation of your coffee maker, your LED TV, or your bedroom set, all of which you might put on craigslist at some point. You don't do it with a car.
        Jasonn
        • 9 Months Ago
        @RocketRed
        Not necessarily. What happens when you total the vehicle only a year into the life of the car? Insurance will only pay what it is worth. If you bought something with a lot of rebates and incentives (that you don't qualify for) and a relatively low resale value, you are going to be in a worse position than if you had purchased something that didn't have those problems.
      normc32
      • 9 Months Ago
      Don't buy a Honda/Acura V6 with a timing belt that needs changing when everyone else is using a metal timing chain. Only Harley Davidsons use belts drive these days. My 2013 turbo charged Buicks can see almost 40 mpg every tankful, are very inexpensive to insure, and the only maintence are tire rotations and 6 quarts of synthetic blend motor oil every 7,500 miles.
        turbo_awd
        • 9 Months Ago
        @normc32
        Wait, so you're upset with a once-every-100K-miles maintenance item, but then offer as an alternative a turbo vehicle, where almost everyone knows turbos aren't even guaranteed to last 100K miles, and the results can be just as catastrophic? In my case, Subaru switched the oil change interval to 3750 miles (and full synthetic!) a few years after I bought the car, when initially it was at 7500 miles. Turns out, way too many turbos died prematurely - I'm sure people were glad to hear 3-5 years AFTER they were doing 7500 mile oil changes that that was, in hindsight, too long and bad for the turbo/engine!! If I were you, and you want your car to last, I'd change it with full synthetic every 3000-4000 miles, regardless of what Buick says.. Turbos are harder on engine oil, period.
          normc32
          • 9 Months Ago
          @turbo_awd
          I do use Mobil 1 even though half my driving is city/half highway with a Trifecta ECU tune and supporting mods. Switch to synthetic and the Saab guys are seeing 300,000+ and only then does the turbo start to smoke on cold starts. I have a turbo charged 2.4l ECOTEC in my Saturn Sky with 15 psi good for 300 whp/350 trq on M1 every 10,000 miles. And the turbo isn't water cooled since it is aftermarket. And that for 60,000 miles and allot of autocrosses.
          Alfonso T. Alvarez
          • 9 Months Ago
          @turbo_awd
          Interesting - so 'everyone knows' turbos aren't guaranteed to last 100K miles? Wow, so I guess the 100K mile powertrain warranties on ALL powertrain components offered by several brands were put in place by people who don't know that their company will lose their shorts on all the turbo motors sold? Wow, they must be really stupid, eh? /s
      Koenigsegg
      • 9 Months Ago
      cant wait till gas runs out
        csgill75
        • 9 Months Ago
        @Koenigsegg
        Yeah, no that won't happen in our lifetime.....
      HalfaScientist
      • 9 Months Ago
      Never buy a new car, but you can get great deals on leasing a new car. My parents just leased a new Ford Fusion for 3 years, 2K down, $260 a month. MSRP was around 24k-25k, but there was a 1K rebate. Be mindful of insurance cost though.
        Dr_Feelgood
        • 9 Months Ago
        @HalfaScientist
        Leasing is NEVER a better choice over buying when it comes to the total money spent because depreciation is 100% since you don't get anything back from all that you paid for the 2 or 3 years you leased the vehicle for. Consider this: $2000 down + ($260 x 36 months) = $11,360 that you will never get back in addition to all the other costs including gas, insurance, registration and maintenance. Now, if you bought it, when it comes time to sell or trade in that vehicle in 3 years, you can at least get the depreciated value ($12-15k) back to subtract from the total value of your next vehicle, which means your next one is about 40-50% cheaper than if you had nothing to trade it at all. Leasing only gives you the illusion that you're saving money because of the low monthly payment but it makes you start from scratch every time you get a new vehicle.
          • 9 Months Ago
          @Dr_Feelgood
          [blocked]
          clquake
          • 9 Months Ago
          @Dr_Feelgood
          Without knowing his parents' financial situation and their personal preferences, you cannot say leasing is never a better choice. Some people prefer to drive a new vehicle every few years. It's also possible that they write off the lease payments. Your math also does not consider that normal loan payments are much higher, and at the end of three years, the loan is still likely to be more than the value of the vehicle, so if you trade it in, you're likely to have to roll what you still owe into a new loan or pay it out of pocket. Insurance, gas, registration & maintenance are a constant, you never recover these whether you lease or buy so these are non factors. It boils down to how far into the future you plan to keep the vehicle. Short term, leasing is better for cash flow. If you're gonna say buy it in cash and not put full insurance on it, then the scenario will never apply, as the buyer is most likely too cheap/cash strapped and will never consider a new car in the first place.
          Dr_Feelgood
          • 9 Months Ago
          @Dr_Feelgood
          Clquake, the OP never said anything about using the car for business; all he mentioned was the car payment and down payment values. We can only use the information given to us for a certain argument. Or course it goes without saying that adding the information you proviced will change the whole argument. Although you are right in saying leasing is probably better for businesses because they can be used to save money for tax purposes, leased cars also have severe limitations on mileage, typically at 12,000 a year, which rules it out as an option if using it for business will mean driving it for way more than that a year. Your premises will also have to assume that the person who purchases a car is going to change it in 3 years. (The average car in the US is now 6 years before it is changed: https://www.polk.com/company/news/u.s._consumers_hold_on_to_new_vehicles_nearly_six_years_an_all_time_high) . I also used the assumption in my example that the car should have been paid off in 3 years before trading it in, using Suze Orman's rule that if you can't pay off your car in 3 years, your car is beyond what you can really afford. So if I purchased a car for 24k like the OPs example and had good credit history/score to be able to obtain a 1.99% APR (as I currently do), the total expense would be $2000 down + (630 x 36) = $24,680. If I put 36,000 miles on it in 3 years, I'd be able to sell the car for 14-15K. Subtracting the more conservative estimate of 14k from $24,680 means I paid $10,680 VS $11,360 if I had leased it. That's 11k less in car payments if I decide to keep my car for 3 more years and 11k that I could put in savings or invest to make more money. Leasing is advantageous to somebody who likes changing his car every 2-3 years; I will give you that. So if you do use it for business (and you are able to limit its use to less than the maximum allowable mileage) and you are 100% certain that you will be changing every 2-3 years, then leasing may be the better option. Purchasing, however, gives you the freedom not to have to change your vehicle in 3 years should you decide not to, which as the study above proves, is increasingly less common in the US. Leasing chains you to monthly payments in perpetuity. One less car payment may mean everything in the future if a life altering change happens in 3 years like, say having a child. It may really come down to your lifestyle and preference (new car every 2 years VS more money in the long term). If saving money in the short term is more important to you and if you are certain about changing cars every 2 years and no life changing moments are to be expected, I guess leasing would be better than buying. Purchasing just allows for more financial (and car alteration and mileage use) flexibility and savings if we're talking about the long term, especially if you're the typical person who keeps the same car for 6 years or more.
          Dr_Feelgood
          • 9 Months Ago
          @Dr_Feelgood
          I guess it's the changing of cars every 2 years that's ultimately gonna end up being costly. Try doing the math for leasing 5 cars in 10 years VS maintaining one car well for 10 years. So like I said, it really boils down to what's more important to you.
          HalfaScientist
          • 9 Months Ago
          @Dr_Feelgood
          It's all circumstantial. My parents bought out the lease on a 2009 Camry that I use now. Their lease had a 1.2% APR and by the end of the lease they had paid about half the car's value. They got a loan for about the same APR as the lease to finance whatever was left, and paid off the loan in 2 years when it was meant to be a 4 year loan. If I remember correctly, attempting to buy the car instead of leasing would've had a 3.5% APR, which is significant over time. At the end, the money they saved was from the different interest rates that were offered at the time. Also keep in mind that used cars have higher interest rates than new car loans or leases. I'm personally aiming at buying a used 370z cash when I graduate college, that's about 2 years from now. That way I avoid the interest rates associated with used cars. To each their own.
        Dr_Feelgood
        • 9 Months Ago
        @HalfaScientist
        Clquake, the OP never said anything about using the car for business; all he mentioned was the car payment and down payment values. We can only use the information given to us for a certain argument. Or course it goes without saying that adding those other information will change the whole argument. Although you are right in saying leasing is probably better for businesses because they can be used to save money for tax purposes, leased cars also have severe limitations on mileage, typically at 12,000 a year, which rules it out as an option if using it for business will mean driving it for way more that a year. Your premises will also have to assume that the person who purchases a car is going to change it in 3 years. (The average car in the US is now 6 years before it is changed: https://www.polk.com/company/news/u.s._consumers_hold_on_to_new_vehicles_nearly_six_years_an_all_time_high) . I also used the assumption in my example that the car should have been paid off in 3 years before trading it in, using Suze Orman's rule that if you can't pay off your car in 3 years, your car is beyond what you can really afford. So if I purchased a car for 24k like the OPs example and had good credit history/score to be able to obtain a 1.99% APR (as I currently do), the total expense would be $2000 down + (630 x 36) = $24,680. If I put 36,000 miles on it in 3 years, I'd be able to sell the car for 14-15K. Subtracting the more conservative estimate of 14k from $24,680 means I paid $10,680 VS $11,360 if I had leased it. Leasing is advantageous to somebody who likes changing his car every 2-3 years; I will give you that. So if you do use it for business (and you are able to limit its use to less than the maximum allowable mileage) and you are 100% certain that you will be changing every 2-3 years, then leasing may be the better option. Purchasing, however, gives you the freedom not to have to change your vehicle in 3 years should you decide not to, which as the study above proves, is increasingly less common in the US. Leasing chains you to monthly payments in perpetuity. One less car payment may mean everything in the future if a life altering change happens in 3 years like, say having a child. It may really come down to your lifestyle. If saving money in the short term is more important to you and if you are certain about changing cars every 2 years and no life changing moments are to be expected, I guess leasing would be better than buying. Purchasing just allows for more financial (and car alteration and mileage use) flexibility and savings if we're talking about the long term, especially if you're the typical person who keeps the same car for 6 years or more.
          Seth
          • 9 Months Ago
          @Dr_Feelgood
          Don't forget - many people shop for a car like a cell phone and aren't in it for the financial games. They expect to spend a fixed amount on a car every month forever. They get a 2 year contract and want to know how much car can they get per month. Then they upgrade their car at the end of the term like they upgrade their phone. No money down, no concern about mileage, just total monthly cost (and they roll in the maintenance too) It is here where insurance pricing becomes very important (as the article mentions) because the savings there can put you into a more expensive lease for no additional funds out of pocket. For example - if you were to lease, in south florida anyway, a loaded honda civic (EX-L)...once you tally the cost of gas and insurance over the cost of the lease, and compare to, say, a loaded ILX (prem) you end up at the same monthly price. Even though the vehicles sticker over $6k apart. The lower depreciation of the acura and lower insurance make it as affordable (if you want to just pay month to month) as a honda.
          Dr_Feelgood
          • 8 Months Ago
          @Dr_Feelgood
          Seth, if you just read the last 2 paragraphs of my comment, especially the last one and this sentence: "If saving money in the short term is more important to you and if you are certain about changing cars every 2 years and no life changing moments are to be expected, I guess leasing would be better than buying," it would have saved your all the trouble of repeating essentially the same thing in 3 paragraphs.
      radroach
      • 9 Months Ago
      Maintenance on my BRZ is adding up quite a lot, about to do my 30k service / checkup at the dealership after over 1 year of ownership, and Subaru only fronts the cost for about only 3 of those, and that doesn't include alignments which I think is crazy. Not to mention the looming $400 spark plug change at 60k miles or the $1000 clutch replacement I'll want to have at some point. I'm starting to think I was crazy to think the BRZ would be cheap to have as a high mileage DD car. Meanwhile, BMW offers free 50k maintenance covering everything including the clutch, and you can extend it to 100k miles for what I'd consider a fair small premium. I'm kinda jealous.
        Mike Pulsifer
        • 9 Months Ago
        @radroach
        Extend it. 50K is no good because of the (expensive) 60K maintenance visit.
        Edsel
        • 9 Months Ago
        @radroach
        No, no, no... BMW will cost quite a bit after the warranty expires. Unless you can service the vehicle yourself and have a friend at the BMW parts counter a BMW will exhaust your patience and your wallet. After five BMW's I'm exhausted.
          19nomad56
          • 9 Months Ago
          @Edsel
          That's why most German cars are leased. I will be turning in my BMW in a few months, after paying zero for anything maintenance or service-wise. They even put new wipers on the last time I was there. Of course, nothing in life is free and you just pay for the "free" service as a premium on the price of the car. Still, it's nice not to have to think about these things.
          Feurig
          • 9 Months Ago
          @Edsel
          @19nomad56, and that's what some people here don't realize. Leasing or buying new is almost always to have the convenience not to think about those things. That convenience costs money, though, as does everything in life that makes things easier.
        chrishs2000
        • 9 Months Ago
        @radroach
        Maybe it's time to learn how to do these incredibly simple services by yourself, or pay a friend to do them for you. $400 spark plug change? Spend $60 on the OEM plugs, buy a $200 mechanics tool set and a $80 service manual and have at it. Also, BMW will absolutely not replace a clutch for free under warranty. That is a wear item.
          radroach
          • 9 Months Ago
          @chrishs2000
          Boxer engines require you to lift the engine to work on it. I have a tuner shop I could ask if they want the job instead however.
      BYALTF
      • 9 Months Ago
      Buying used should always better if you're car savvy, but buying new can be OK too. In 96 I purchased a Ford van that the KBB private sale price was still a few dollars more than I paid 3 years later. I kept if 14 years, so depreciation was not my highest concert. It was rock solid and had no expensive repairs in all those year. I purchase a gen3 Prius in 09 and 2 years plus 20k miles later is KBB still had it as worth nearly $1000 more than I paid. It's rock solid too and won't be sold any time soon. Then again, I've purchase a number of used cars that years later sold for more than I paid. I typically keep cars for many year if purchased new. The biggest hits I've taken have been with GM cars. I tired of them too quickly and never wanted to keep them long term. The key to low depreciation per year is to drive them forever. 14 years is my record for a new purchase, but I've had used vehicle nearing the 25 year mark, so the right ones can last.
      Max
      • 9 Months Ago
      I estimate that my 2001 VW Golf TDI costs me $2,900 a year. I bought it in 2004 for $9K with 80K miles on it; now it has 260K miles and I can resell it for $5K. So 10 years of ownership at $9K minus the current value of $5K equals $4K over 10 years or $400 per year. Insurance costs me $500 per year, registration is less than $150, $1,200 for fuel, and $800 for general maintenance (oil, filters, battery, tires, timing belt, etc). The secret is to buy a reliable used car at a great price and learn to take care of it yourself; it'll save you quite a bit of money.
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