The cheapest 2012 cars to own
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To wring the most value out of your ride you’ll have to work the bottom line like an accountant and think long-term like an investment adviser when you go out shopping for a new car or truck. That doesn’t necessarily mean settling for the cheapest car on a dealer’s lot just to save a few bucks. No matter what type of vehicle you favor, keeping a watchful eye on long-term ownership costs can mean substantial savings over a typical five-year ownership period.
“Car shoppers should take the time to compare vehicles on their consideration lists to fully understand the financial implications involved with cost of ownership,” says Juan Flores, director of vehicle valuation for Kelley Blue Book. “While a vehicle might be less expensive up front, the cost of fuel for that model, insurance and other expenditures could make it the less appealing choice for their wallet in the long run.”
Fortunately, the Internet makes comparing new-car ownership costs easier than scouring financial reports to pick stock-market winners. We consulted Kelley Blue Book, which recently announced its inaugural Total Cost of Ownership Awards. The kbb.com website tracks anticipated depreciation, fuel costs, insurance costs, financing, repairs, maintenance, and average state sales taxes and registration fees over a five-year ownership period for most makes and models, and even provides a per-mile expenditure for easy comparison. The accompanying slide show highlights models in 20 separate categories that kbb.com predicts will be the cheapest to own, based on the above cost assumptions.
Generally, the more expensive the vehicle, the more important differences in projected ownership costs become, simply because there’s more money at stake. “Total cost of ownership among relatively less expensive vehicles does not vary by more than $1,000 to $3,000,” Flores explains. “But in the luxury or near luxury segments, the variance can be within $8,000 to $10,000, and in the high-end luxury segment, total cost of ownership can vary by $20,000.”
When looking for a car that’s cheapest to own, you’ll get the biggest return on your investment by picking a model that’s predicted to hold its value better over time than others in its class, based on economic factors and historical data. This is likewise important for those leasing a vehicle because payments are largely based on its projected value at the end of the contract’s term. According to Flores, Kelley Blue Book begins its depreciation calculations with the average new-vehicle transaction price, based on what car shoppers are actually paying for a new car (not the Manufacturer Suggested Retail Price, or MSRP).
The next most-important cost variable to consider is a car’s fuel economy. With the national average price for a gallon gas at $3.51, according to the AAA (with $4.00/gallon a probability by summer), buying a more fuel-frugal model can mean significant savings. For example, the annual estimated cost difference between a vehicle that gets 20 mpg and one that’s rated at 30 mpg is $878 (based on current gas prices and 40 percent highway/60 percent city driving at 15,000 miles/year) according to the EPA’s fuel cost calculator at fueleconomy.gov. That’s a difference of $4,390 over a five-year ownership period, with even greater savings at stake if fuel costs continue their upward trend.
Another major cost factor is the price of auto insurance. While rates are based largely on a person’s driving record, age, gender, credit rating, address and miles driven, some cars are inherently cheaper to insure based on their claims histories and repair costs. Family-oriented minivans and crossover SUVs generally garner the lowest rates, with high-performance sports cars and top-of-the-line luxury cars being assessed the costliest premiums. Always consult with an insurance agent when shopping for a new car to compare rates among various models under consideration and shop among several companies to garner the best deal.