While sport-utility vehicles and pickup trucks are all the rage these days, good old passenger cars still account for around 30 percent of the new-vehicle market. A major benefit to breaking from the pack and ignoring an SUV’s siren song is that autos not only cost less to purchase than their tall-roofed counterparts, they’re cheaper to own in the long term, too.
According to the 2019 Five-Year Cost-to-Own analysis conducted by the valuation experts at Kelley Blue Book, the compact car having the lowest overall ownership costs over a half-decade period winds up being $2,269 cheaper than the least costly-to-own compact SUV. The spread is nearly $5,000 between the midsize sedan having the lowest long-term costs and the cheapest-to-keep midsize SUV.
Astute vehicle shoppers know that to get the most out of any automotive expenditure they’ll have to look beyond the purchase price and keep a watchful eye on essential ongoing ownership costs. Key factors include depreciation, fuel costs, insurance premiums, repairs, and maintenance. Generally, the more expensive the vehicle, the more important differences in projected ownership costs become over time, simply because there’s more money at stake to lose.
When looking for a car that’s cheapest to own, it pays to choose 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 equally important for those leasing a vehicle because payments are largely based on its projected value at the end of the contract’s term. The next most-important cost variable to consider is a car’s fuel economy, which is gaining in importance with this year’s spike in gas prices.
Another major cost factor is the price of auto insurance premiums. While rates are based largely on a policyholder’s driving record and other personal factors, some cars – particularly costly luxury models and racy sports cars – are inherently more expensive to insure based on their claims histories and repair costs. Maintenance and out-of-warranty repair costs likewise differ from one make and model to another, based on the manufacturer’s service schedule and the cost of parts.