I recently purchased a new (used) car. In the process I created an Excel spreadsheet to help me analyze the long term cost of owning different cars. For some guidance on what goes into the calculations, I consulted Vincentric, a research firm in Bingham Farms, Mich. Vincentric specializes in calculating cost of ownership for vehicles and tracks more than 2,000 models. They sell their software to fleet managers, car dealers, banks and car manufacturers.
The following eight factors go into the long-term car cost of ownership calculations: purchase price, depreciation, financing, fees and taxes, fuel costs, fuel economy, insurance, and maintenance and repairs.
Here are some screenshots of the spreadsheet:
Input your own driver, vehicle, financing and fuel costs to personalize your estimates and find the least expensive long-term vehicle option. Choosing the right vehicle will save you thousands of dollars over the next few years. The spreadsheet is available for sale from my Research Offers page.
A few things stood out to me in doing the comparisons:
-Everything matters – small changes can have a big impact on the long-term ownership cost.
-Some things matter more – Purchase price (and therefore depreciation) and mpg are key.
-It’s amazing how close some new cars are in long-term costs, despite variable purchase price and mpg. Manufacturers must know and plan for this. The images above show several new car models with exact same 5-year costs of ownership. Even the Chevy Volt came in equal to more standard vehicles.
The real value can be found in buying a used car. None are shown above but that’s where I spent most of my time, looking at 2-3 year old cars with good gas mileage. The costs can get really low on a used car with great fuel economy.
Before buying a new or used car I highly recommend the following:
from this website:
How to Select a Vehicle that will Save your Life – which is about InformedforLife.org, who do a fantastic job analyzing real safety data in order to recommend the safest new and used cars.
Buying a Car (How much Car can you afford?)
To determine a fair price to pay for a new/used car I recommend Edmunds.com
When you are finally ready to negotiate an offer on a new or used car, here are two fantastic articles from Negotiation Dynamics:
Negotiating to Buy a New Car; and
Visit the Research Offers page to obtain this spreadsheet.