SFGate
Gas just one factor in cost of owning a car
Kathleen Pender
Thursday, May 29, 2008
The owners of sport utility vehicles and other gas hogs are feeling particularly squeezed these days. While the cost of filling their tank is going through the roof, the value of their cars is falling fast.
Between March and April of this year, average used-car prices fell 4.5 percent for large SUVs and 5.6 percent for large pickup trucks, according to J.D. Power & Associates. They rose 7.3 percent for compact basic cars such as the Honda Fit, Toyota Yaris or Nissan Versa.
A separate study by Kelly Blue Book found that large luxury cars, such as the Mercedes-Benz S-Class and BMW 7 Series, "are depreciating even faster than SUVs," says Kelly spokeswoman Robyn Eckard. She says large luxury cars get the same lousy gas mileage as SUVs - about 12 miles per gallon. But unlike most SUVs, they generally require premium gasoline.
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The biggest cost, according to Consumer Reports, is depreciation (48 percent), followed by fuel (21 percent), interest (12 percent), insurance (11 percent), maintenance and repairs (4 percent), and taxes (4 percent).
"The first three years of owning a vehicle is the most expensive time," says Jeff Bartlett, deputy automotive editor with ConsumerReports.org.
That's because cars depreciate or lose their value fastest in the first three years and much more slowly in later years. And if you finance the car, interest will make up a larger percentage of your monthly payment in the early years and a smaller portion in later years. Home loans work the same way, although over a much longer period.
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If you're buying a car for environmental reasons, it makes sense to buy the highest-mileage vehicle that fits your budget and needs.
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But if you're looking for a good trade-off between fuel economy and overall cost to own, here's what three automotive experts suggest.
-- Jack Nerad, executive market analyst with Kelly Blue Book, recommends "a high-mileage conventional vehicle," such as the Honda Civic.
Alternatively, "a 2- or 3-year-old Hyundai is a pretty high-quality vehicle, but because it doesn't have as good resale value, it might be a better deal than a Civic," he adds.
-- Philip Reed, senior consumer advice editor for Edmunds.com, says gas-electric hybrids get superior gas mileage but cost more than their non-hybrid counterparts.
As gasoline prices rise, the time it takes to recoup the price premium is shortening for some models, Reed says. "It's down to 1.6 years for the Toyota Camry hybrid," Reed says. For other hybrid models, see links.sfgate.com/ZDNO.
-- Bartlett says, "The best way to improve fuel economy is to buy just the size you need, not a size bigger."
Among hybrids, "the slam dunk now is the Toyota Prius."
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