Misers' models: 10 cheapest cars to own
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Even adjusted for inflation, from 1986 to 2013 (about $8,400 in today's money), that's a steal—and one that did indeed prove irresistible for more than 140,000 thrifty Americans.
Yet the GV—for 'great value,' ironically—didn't save its buyers money in the long run. Costly premature engine and clutch failure were surprisingly common and expensive; gas mileage was disappointing for what it was; resale values plummeted; and insurers charged more in premiums because they didn't trust the Yugo's occupant protection. It underlines an important distinction: The cheapest cars to buy aren't necessarily the cheapest to own.
That advice holds true today, yet thanks in part to tighter federal regulations, more of the cheapest models are now safe, dependable, and truly penny-pinching picks over the long term.
Lower-priced cars typically cheaper in the long run
“The smaller, lower-priced cars have the lowest cost of ownership,” said David Wurster, the president of Vincentric, a data analysis firm providing cost-of-ownership information. The cheapest models—which include cars like the Nissan Versa and Ford Fiesta—all have sticker prices under $15,000 and five-year ownership totals under $30,000.
To put it into perspective, that five-year Vincentric ownership number, which includes depreciation, insurance, fuel expenses, maintenance and repair costs, and even an 'opportunity cost'—for what you maybe have earned on your money elsewhere—totals more than $100,000 for many luxury models and more than $200,000 for the Mercedes-Benz S 65 AMG or CL 65 AMG.
Soothing depreciation's sting
Looking at all the components that add up to what a car costs to own, it's the sting of depreciation that hurts most. According to Kelley Blue Book, the average new car will be worth just 35 percent of its original value after five years; and with a current average around the $30k mark, you’ll essentially lose nearly $20,000 for the privilege of driving a new car. Late-model used cars are often the better deal for that reason, as they dodge the steepest part of the depreciation curve, but if you want a new car, along with many of the things that come with new-vehicle ownership—like a strong warranty, the relatively low chances of a breakdown, and modern safety features—you don't need to spend a lot.
Considering these other factors, like insurance costs, anticipated reliability, and projected resale value, if you can find something at the lower end of the market that you like (and if you’re okay doing without the glamor of a more upscale new car), you’ll also take the smallest hit to your wallet in the long run.
That said, unless you’re obsessed with being a die-hard miser, you can’t get too caught up in the bottom-line cost projections. The totals are best viewed when comparing vehicles within the same class against each other, Wurster emphasizes. In other words, choose the kind of vehicle you need first (minivan, crossover, etc.) and then compare the costs.