Published on September 14th, 2019 | by Steve Hanley0
Surprise! AAA Survey Finds Large Vehicles Cost More To Own Than Small Vehicles
September 14th, 2019 by Steve Hanley
The Trump administration is committed to rolling back fuel economy standards for passenger cars and light trucks. It is also planning to revoke California’s legal authority to impose stricter emissions standards than federal law requires, a move that will cost consumers over $400 billion, according to Energy Innovation. Last week, it threatened 4 automakers with antitrust litigation because they dared to cross the administration and struck a separate agreement with California.
The rationale for back peddling on emissions is that it costs manufacturers more to make low emission vehicles and that means poor people won’t be able to afford new cars any more. The government under Trump has done everything it can to punish poor people for being poor, yet has the temerity to suggest now it is suddenly deeply concerned about them. This administration’s hypocrisy is there for all to see, but few have been willing to call it out for its blatant lies.
Every year, AAA conducts a study to find out how much it costs to actually own a vehicle, including all the factors that enter into the equation — purchase price, financing, taxes, insurance, fuel, depreciation, maintenance, and repairs, assuming it is driven 15,000 miles a year. It turns out, when you add all those things up, the result in this year’s survey is a surprisingly big number — $9,282 on average. That, people, is $773.50 each and every month that little 4-wheeled beauty, the joy of your life, sits in your garage.
According to Autoblog, “The most affordable new cars are small gas-powered cars with an average cost of $7,114 per year. At the other end of the spectrum are pickup trucks with an average annual cost of $10,839.” The biggest factor for many car owners is financing. AAA reports that portion of total expenses rose 24% compared to 2018.
Why is that? Because the price of new vehicles — especially large SUVs and pickup trucks — is so high, buyers are taking out longer and longer loans — up to 6 years or even more in some cases — which means they are paying far more in interest. With those longer loans, buyers end up paying more in interest than the purchase price of the vehicle they are buying. Maybe the problem isn’t fuel economy regulations driving up the cost of cars. Maybe the problem is manufacturers making larger and larger vehicles in the quest to larger and larger profits?
AAA breaks down the ownership costs by category of vehicle as follows:
- Small Sedan: $7,114
- Hybrid: $7,736
- EV: $8,320
- Small SUV: $8,394
- Medium Sedan: $8,643
- Medium SUV: $10,265
- Large Sedan: $10,403
- Pickup Truck: $10,839
Here are the models AAA included in each category:
- Small sedan: Chevrolet Cruze, Honda Civic, Hyundai Elantra, Nissan Sentra, and Toyota Corolla
- Medium sedan: Chevrolet Malibu, Ford Fusion, Honda Accord, Nissan Altima, and Toyota Camry
- Large sedan: Chevrolet Impala, Chrysler 300, Ford Taurus, Nissan Maxima, and Toyota Avalon
- Small SUV: Chevrolet Equinox, Ford Escape, Honda CR-V, Nissan Rogue, and Toyota RAV4
- Medium SUV: Chevrolet Traverse, Ford Explorer, Honda Pilot, Jeep Grand Cherokee, and Toyota Highlander
- Minivan: Chrysler Pacifica, Dodge Grand Caravan, Kia Sedona, Honda Odyssey, and Toyota Sienna
- Pickup truck: Chevrolet Silverado 1500, Ford F-150, Nissan Titan, Ram 1500, and Toyota Tundra
- Hybrid car: Ford Fusion, Hyundai Ioniq, Kia Niro, Toyota Prius Liftback, and Toyota RAV4
- Electric car: BMW i3, Chevrolet Bolt, Kia Soul, Nissan Leaf, and Volkswagen eGolf
Sharp-eyed readers will notice that EVs have a lower cost to own than many of the most popular cars in new cars today — SUVs and pickup trucks. That’s despite the fact that EVs tend to cost more than equivalent gas models and suffer from high depreciation. The truth is, those giganta-mobiles also take a big depreciation hit at trade-in time.
Perhaps the best way to illustrate why vehicles cost so much to buy and so much to own today is to study the photo below, which shows an early BMW 3 Series sedan parked next to a current BMW SUV. The manufacturers say they only build what the market demands. But maybe demand is driven by the hundreds of millions of dollars car companies spend on advertising every year. What do you think?
— ePionier⚡️sᴉɹɥɔ (@ePionier) September 6, 2019
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