Lower Gas Prices Help Fuel Two Percent Decline From 2014
PORTLAND, Ore., – Due to declines in gas prices and finance charges, the annual cost to own and operate a vehicle has fallen to $8,698, a nearly 2 percent drop from last year, according to AAA’s 2015 Your Driving Costs study. This research examines the cost of fuel, maintenance, tires, insurance, license and registration fees, taxes, depreciation and finance charges associated with driving a typical sedan 15,000 miles annually. U.S. drivers can expect to spend 58 cents for each mile driven, nearly $725 per month, to cover the fixed and variable costs associated with owning and operating a car in 2015
“The reduction in fuel and finance costs more than offset rising costs in insurance, depreciation and other expenses,” says Marie Dodds, Public Affairs Director for AAA Oregon/Idaho. “As a result, car owners will save about $178 this year.”
|Based on 15,000 miles||Small Sedan||Medium Sedan||Large Sedan||Sedan Average||Minivan||SUV (4WD)|
|Annual Total Cost||$6,729||$8,716||$10,649||$8,698||$9,372||$10,624|
|Annual Cost Per Mile||$0.449||$0.581||$0.710||$0.580||$0.625||$0.708|
Fuel: DOWN 13.77 percent to 11.2 cents per mile/$1,681.50 per year (-$268.50).
Compared to last year’s study, the average cost of regular unleaded fuel fell nearly 13 percent to $2.855 per gallon. This decline, coupled with improvements in vehicle fuel economy, resulted in an average 11.21 cents-per-mile fuel cost. Due in large part to this decrease, the annual cost of owning and operating a sport utility vehicle is slightly less than that of a large sedan this year.
Finance Charges: DOWN 21.02 percent to $669 per year (-$178).
With rising car sales and stiff competition among dealers, many manufacturers are offering low finance rates to attract buyers. In 2015, average vehicle finance rates dropped 21 percent, which equates to approximately $15 per month on a typical five-year loan. However, rates vary widely with borrower credit scores.
Depreciation: UP 4.10 percent to $3,654 per year (+144).
The single largest ownership expense, depreciation, rose for 2015 due to increasing new car sales that are causing an influx of used and off-lease vehicles entering the marketplace. This increased supply has resulted in lower values and selling prices for used vehicles, thus driving up depreciation costs.
Insurance: UP 8.99 percent to $1,115 per year (+$92)
Insurance rates vary widely by driver, driving habits, insurance company and geographical area. AAA’s calculations are based on low-risk drivers with excellent driving records. While premium calculations are confidential, this modest increase of $7.67 per month may be due in part to high-cost modern vehicle features such as infotainment systems, advanced safety features and lightweight materials that can be more expensive to repair and, therefore, insure.
Maintenance: UP .99 percent to 5.11 cents per mile/$766.50 per year (+$7.50)
Annual maintenance, including labor time and repair part costs associated with factory-recommended maintenance, was factored into the 2015 survey along with average costs of an extended warranty. Maintenance costs varied widely by vehicle type but, on average, were up slightly from 5.06 cents to 5.11 cents per mile. A recent survey of AAA-Approved Auto Repair shops found that the majority of drivers are behind schedule in routine maintenance, including oil changes, tire maintenance and battery inspection/testing.
License/Registration/Taxes: UP 3.74 percent to $665 per year (+$24)
Vehicle prices rose modestly in 2014, contributing to an overall increase in state and local tax costs. Additionally, some states increased fees related to vehicle purchasing, titling, registration and licensing.
Tires: UP 1.03 percent to .98 cents per mile/$147 per year (+$1.50)
Due to the competitive and dynamic nature of the tire market, tire costs in 2015 remain relatively unchanged, rising by just .01 cents per mile.
Smaller vehicles don’t always cost less
In addition to calculating the driving costs for sedans, AAA determined annual costs associated with both minivans and sport utility vehicles. Owners of these vehicles will benefit from annual driving costs nearly four percent lower this year, at $9,372 and $10,624 respectively, due to lower gas prices and finance rates.
“When shopping for a vehicle, smaller isn’t always cheaper,” says Steve Fox, Director of Automotive Services for AAA Oregon/Idaho. “A minivan can carry up to 7 passengers, yet costs $100 less to own and operate each month compared to a large sedan. With SUVs, older truck-based designs are being replaced by car-based platforms. These get great fuel economy, and insurance and depreciation costs are often less than for large sedans.”
What can consumers do to lower driving costs?
Driving costs vary widely based on driver, vehicle type and usage. Consumers can reduce their annual driving costs in several ways. First, to reduce depreciation costs, they can purchase a vehicle that historically holds its value well. Also, they can select a less expensive vehicle, or one with higher fuel economy to help offset other costs. Both insurance and finance costs will vary with the provider, so consumers should always shop around to find the best rates. And finally, drivers should avoid over-maintaining their vehicles. Too-frequent oil changes or other unnecessary services result in higher service costs. Always follow the manufacturer’s recommendations.
AAA has published Your Driving Costs since 1950. That year, driving a car 10,000 miles per year cost 9 cents/mi, and gasoline sold for 27 cents/gal.
The Your Driving Costs study employs a proprietary AAA methodology to analyze the annual cost to own and operate a vehicle in the United States. Variable operating costs considered in the study include fuel, maintenance and repair, and tires. Fixed ownership costs factored into the results include insurance, license and registration fees, taxes, depreciation and finance charges. Ownership costs are calculated based on the purchase of a new vehicle driven over five years and 75,000 miles. Your actual operating costs may vary. See AAA’s 2015 Your Driving Costs brochure for a list of vehicles and additional information on the underlying criteria used in the study.