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Does anyone else feel the ownership cost estimate for cars from AAA are wildly inflated? They estimate that it costs $9,122 a year for a Toyota Camry (driven 15,000 miles a year). So if a Toyota Camry gets 30 mpg, that's 500 gallons of fuel, at $4 a gallon, that gives us a cost of $2000 a year in fuel, Figure another $1,500 for insurance and even if it cost $1,000 a year for maintenance (which I still think is high, maintenance costs the first 3 years should be minimal), grand total of $4,500 a year. That means that AAA says the Camry is depreciating $4,500 a year. Over 10 years, that's $45,000, which is a lot for a car that costs 22k new, and is still worth still worth $3,500 after 10 years.
Does anyone else feel the ownership cost estimate for cars from AAA are wildly inflated? They estimate that it costs $9,122 a year for a Toyota Camry (driven 15,000 miles a year). So if a Toyota Camry gets 30 mpg, that's 500 gallons of fuel, at $4 a gallon, that gives us a cost of $2000 a year in fuel, Figure another $1,500 for insurance and even if it cost $1,000 a year for maintenance (which I still think is high, maintenance costs the first 3 years should be minimal), grand total of $4,500 a year..
Using your figures, the original cost of the car amortized over 3 years has to be included, so $22,000/3=$7,333 + your $4,500 = $11,833 not counting depriciation. Their figure may actually be low.
Using your figures, the original cost of the car amortized over 3 years has to be included, so $22,000/3=$7,333 + your $4,500 = $11,833 not counting depriciation. Their figure may actually be low.
Why would you amortize the entire cost of the vehicle over three years? The car certainly will last more than 45k miles. I would say that TEN YEARS would be more realistic. Even at that point, you would also need to make a assumption for salvage value at 150k miles which should be close to $3,000.
I really like The Auto Club (AAA), I've used their insurance products, have had high level roadside/motorcycle coverage with them for close to two decades, their customer service is top notch .... But their auto reviews are worthles, especially for anyone slightly resemblining an enthusiast. They write for the "average" buyer, which is simply not me. YMMV.
Does anyone else feel the ownership cost estimate for cars from AAA are wildly inflated?
Yup, I saw that this morning too while reading through my news and just shook my head. That number May represent Some people, but I hardly think it's the majority. Mostly I took a look at myself, $10k car purchase in 2005, quick glance at CL shows that people are asking $5~6k for that same vehicle today (VW TDI), and I HAVE a spreadshet with 100% of my cost, from fuel on up to insurance/reg ~ total in, I have $18657.54 (including vehicle purchase). 8 years in, 241,000 miles on the car and even if I completely ignore any potential parts/resale value (just assume I have to eat 100% of the purchase price), I'm STILL only at $2332.19/year. That number does nothing but drop. That means I'm spending $0.10/mile ~ one sixth their figure (184k of the 241k miles are mine).
But their numbers are probably based on a 4~5 year purchase cycle, buying at MSRP and selling at "trade-in" to stretch the depreciation numbers. As the saying goes, there are 3 types of lies. Lies. Damn lies and Statistics.
They are probably factoring in monthly payments which are mostly interest. They would also include registration. They may include some cost for storing the car. You are a little off on your 30 MPG assumption, unless you are looking at a Hybrid. With a hybrid, they probably amortize the cost of battery replacement.
They are probably factoring in monthly payments which are mostly interest. They would also include registration. They may include some cost for storing the car. You are a little off on your 30 MPG assumption, unless you are looking at a Hybrid. With a hybrid, they probably amortize the cost of battery replacement.
Interest rates are low now, it would add minimal amounts to costs of ownership. The combined MPG for the Camry and Focus is 28 MPG, so I wasn't off by much, Hybrids typically get into the 40 MPG range. The only way you would see the kinds of ownership costs that are estimating is if people traded in there cars every three year, and it's a fact people have been keeping cars longer, so the cost of ownership should be falling, not raising.
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I'll bet they are CLOSE for "Average Joe USA." (Lease or loan payments, full coverage, PAYING for service work...)
I'll stick with the "StealthRabbit" ~ $600/yr including FULL COST depreciation ($35 TOTAL purchase price )
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