AAA: 2018 “YOUR DRIVING COSTS” STUDY RELEASED

 
NEWS RELEASE
CONTACT:   AAA – The Auto Club Group
Susan Hiltz, Public Affairs Director, Michigan
C: 586.940.0278 - slhiltz@aaamichigan.com
 
 
 
 
 
 
 
AAA: 2018 “YOUR DRIVING COSTS” STUDY RELEASED
Depreciation and resale value important factors when buying new vehicle
DEARBORN, MICHIGAN (September 13, 2018) — AAA’s 2018 Your Driving Costs study reveals that many consumers don’t understand the dynamics of vehicle depreciation. Its important consumers realize the value of a new vehicle decreases once the car drives off the lot. In fact, it accounts for almost 40 percent of the cost of owning a new vehicle. That cost alone could account for more than $3,000 per year and is influenced by a number of factors, including shifting consumer preferences. AAA https://us.vocuspr.com/Publish/522440/vcsPRAsset_522440_109958_8b014077-0cc5-43e5-ab5a-afd19781f6a1_0.pngurges car buyers to think about factors, such as, market trends and length of ownership before they purchase their next vehicle.
"Consumers purchasing a new vehicle often don’t consider whether it holds its value or not,” said Susan Hiltz, Michigan public affairs director, AAA - The Auto Club Group. “Selecting a car that depreciates at a slower rate can have a significant financial impact in the long run.”
AAA’s annual analysis found demand for sedans has slipped as American appetite shifts to SUVs and pickup trucks. As a result, depreciation costs of these once-popular vehicles increased up to 13 percent as compared to last year. Electric and hybrid vehicles, however, have seen a gain in popularity with 20 percent of Americans saying they will likely go electric for their next vehicle purchase, up from 15 percent the previous year. This year, these vehicles also saw a dip in depreciation and offer many cost benefits such as lower repair and maintenance bills, making going green a more affordable choice than in years past.
Buyers often only give priority to purchase price and monthly payment when choosing a new car, sometimes selecting a vehicle based on the best deal available. The length of car ownership, however, is of equal importance. Consumers who plan to keep a vehicle for only a few years should be cautious of deep discounts and incentives offered by automakers and dealers. These are often designed to sell less popular models and directly influence depreciation. Low down payments and extended finance terms can also have a similar effect. Stretching a car loan over five, six or even seven years may be an effective way to lower payments, but owners may quickly find themselves owing more than the vehicle is worth.
Leasing is similarly affected since payments are based in part on the projected residual value of the car at the end of the lease, serving as a good indicator of which models experience higher or lower depreciation. Since resale value is not a factor at the end of the lease period, buyers who prefer less popular models or only want a vehicle for a short time, may consider leasing a more viable option.
AAA’s Your Driving Costs found the average cost to own and operate a new vehicle in 2018 is $8,849 per year. The figure is calculated based on the cost of fuel, maintenance, repairs, insurance, license/registration/taxes, depreciation and loan interest. The study examined 45 top-selling 2018 model-year vehicles across the following nine categories.

Vehicle Type Annual Cost*   Vehicle Type Annual Cost*
Small Sedan $6,777   Minivan $9,677
Hybrid $7,485   Medium SUV $9,697
Small SUV $7,869   Large Sedan $9,804
Electric Vehicle $8,384   Pickup Truck $10,215
Medium Sedan $8,866   Average $8,849

 
*Based on 15,000 miles driven annually
While the latest technology, style and options make them attractive to car buyers, a new car may not be the most economical choice for some buyers. Vehicle owners looking for alternatives to new car ownership or ways to minimize their operating costs should consider the following: AAA helps take the guesswork out of finding a trusted repair shop with its Approved Auto Repair (AAR) facilities.  Each AAR facility must adhere to a stringent set of standards for certifications, technical training, cleanliness, insurance requirements, and customer service set forth by AAA. Shops with the AAR designation signal to drivers a vetted facility, inspected annually, that will offer fair pricing and quality service. To locate an AAR facility, drivers can visit AAA.com/AutoRepair. Additionally, AAA also offers a free repair cost calculator, also found at AAA.com/AutoRepair that provides drivers the ability to estimate the cost of a repair or to verify a quote received for their vehicle.

 
AAA’s Your Driving Costs Study employs a proprietary methodology to analyze the costs of owning and operating a new vehicle in the United States, using data from a variety of sources, including Vincentric LLC. Additional information and detailed driving costs, including those for fuel, maintenance, repairs, insurance, license/registration/taxes, depreciation and finance charges can be found at NewsRoom.AAA.com or AAA.com/YourDrivingCosts.
AAA in Michigan celebrated its 100th Anniversary - A Century of Service in 2016 and has over 1.4 million members across the state. It is part of The Auto Club Group (ACG).  Connect with us on Facebook and LinkedIn.
 
The Auto Club Group (ACG) is the second largest AAA club in North America. ACG and its affiliates provide membership, insurance, financial services and travel offerings to over 9.6 million members across eleven states and two U.S. territories including Florida, Georgia, Iowa, Michigan, Nebraska, North Dakota, Tennessee, Wisconsin, Puerto Rico and the U.S. Virgin Islands; most of Illinois and Minnesota; and a portion of Indiana. ACG belongs to the national AAA federation with more than 59 million members in the United States and Canada and whose mission includes protecting and advancing freedom of mobility and improving traffic safety. Motorists can map a route, identify gas prices, find discounts, book a hotel, and access AAA roadside assistance with the AAA Mobile app for iPhone, iPad and Android. Learn more at AAA.com/mobile. Visit AAA on the Internet at AAA.com.