Driv­ing costs hit six-year low, AAA re­ports

An­nual cost to own, op­er­ate a ve­hi­cle falls to $8,558 in 2016

The Calvert Recorder - Southern Maryland Automotive Trends - - Autotrends -

Due to fall­ing gas prices, the an­nual cost to own and op­er­ate a ve­hi­cle in the United States has fallen to a six-year low of $8,558, ac­cord­ing to AAA’s 2016 Your Driv­ing Costs study. This year, a driver can ex­pect to spend 57 cents for each mile driven — ap­prox­i­mately $713 per month — to cover the fixed and vari­able costs as­so­ci­ated with own­ing and op­er­at­ing a car.

• Fuel: DOWN 24.62 per­cent to 8.45 cents per mile/$1,267.50 per year (-$414). Com­pared to last year’s study, the av­er­age price of reg­u­lar fuel fell more than 25 per­cent to $2.139 per gal­lon in the fourth quar­ter. At the same time, ve­hi­cle re­designs and im­proved pow­er­train tech­nolo­gies in­creased the av­er­age fuel econ­omy of the sedans used in the study to 26.71 mpg.

• In­surance: UP 9.60 per­cent to $1,222 per year (+$107). In­surance rates vary widely with driver, driv­ing habits, is­su­ing com­pany, geo­graph­i­cal area and more. While AAA’s in­surance cost es­ti­mates are based on low-risk driv­ers with good driv­ing records, even this group has seen rates rise over the past few years. Ris­ing costs are likely at­trib­ut­able to lower gas prices, which have re­sulted in more miles driven, greater num­bers of col­li­sions and higher in­surance pay­outs.

• De­pre­ci­a­tion: UP 2.87 per­cent to $3,759 per year (+$105). The sin­gle largest own­er­ship ex­pense, de­pre­ci­a­tion, rose for 2016 due to ro­bust new-car sales and, there­fore, in­creas­ing num­bers of used and off-lease ve­hi­cles en­ter­ing the mar­ket­place. This re­duces re­tained value and re­sale prices, thus in­creas­ing de­pre­ci­a­tion.

• Main­te­nance: UP 3.33 per­cent to 5.28 cents per mile/$792 per year (+$25 per year). While there is sig­nif­i­cant vari­a­tion among in­di­vid­ual ve­hi­cles, mod­est in­creases in ve­hi­cle main­te­nance are at­trib­ut­able to en­gines re­quir­ing more ex­pen­sive semi- or full-syn­thetic mo­tor oils, and in­creases in ex­tended war­ranty pric­ing and shop la­bor rates.

A re­cent AAA sur­vey found that 35 per­cent of Amer­i­cans have skipped or de­layed ser­vice or re­pairs that were rec­om­mended by a me­chanic or spec­i­fied by the fac­tory main­te­nance sched­ule. Ac­cord­ing to AAA’s cer­ti­fied Ap­proved Auto Re­pair shops, con­sumers that for­get or ig­nore rec­om­mended main­te­nance ul­ti­mately pay higher re­pair costs.

• Li­cense/Reg­is­tra­tion/Taxes: UP 3.31 per­cent to $687 per year (+$22). Li­cense, reg­is­tra­tion and tax costs are im­pacted by ve­hi­cle sales prices and state/lo­cal tax rates. In ad­di­tion to ris­ing ve­hi­cle prices, many states, coun­ties and cities have in­creased their fees re­lated to ve­hi­cle pur­chas­ing, ti­tling, reg­is­tra­tion and li­cens­ing.

• Fi­nance Charges: UP 2.09 per­cent to $683 per year (+$14). The av­er­age ve­hi­cle fi­nance rate re­mained rel­a­tively un­changed in 2016. The mod­est dol­lar in­crease in fi­nance charges is at­trib­ut­able to higher new car prices com- bined with in­creased tax, ti­tle, li­cense and reg­is­tra­tion fees, which are typ­i­cally rolled into the ve­hi­cle fi­nanc­ing.

• Tires: UP 2.04 per­cent to 1.00 cent per mile/$150 per year (+$3). Due to the com­pet­i­tive and dy­namic na­ture of the tire mar­ket, tire costs in 2016 are rel­a­tively un­changed, ris­ing by just .02 cent per mile.

In ad­di­tion to cal­cu­lat­ing the driv­ing costs for sedans, AAA de­ter­mined an­nual costs as­so­ci­ated with both mini­vans and sport util­ity ve­hi­cles. Own­ers of th­ese ve­hi­cle types also ben­e­fit from lower driv­ing costs in 2016, at $9,262 and $10,255 re­spec­tively.

“One in five Amer­i­cans plan to pur­chase or lease a new ve­hi­cle in the next year, and many con­sumers may mis­tak­enly be­lieve mini­vans are more ex­pen­sive to drive than a large sedan,” Nielsen said. “With lower gas prices, th­ese ve­hi­cles of­fer driv­ers the flex­i­bil­ity of trans­port­ing ad­di­tional pas­sen­gers and cargo while re­main­ing more af­ford­able to own and op­er­ate com­pared to a large sedan.”

AAA has pub­lished Your Driv­ing Costs since 1950. That year, driv­ing a car 10,000 miles per year cost 9 cents per mile. Gaso­line sold for 27 cents per gal­lon.

The Your Driv­ing Costs study em­ploys a pro­pri­etary AAA method­ol­ogy to an­a­lyze the 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 that is driven over five years and 75,000 miles. Your ac­tual op­er­at­ing costs may vary.

As North Amer­ica’s largest mo­tor­ing and leisure travel or­ga­ni­za­tion, AAA pro­vides more than 56 mil­lion mem­bers with travel, in­surance, fi­nan­cial and au­to­mo­tive-re­lated ser­vices. Since its found­ing in 1902, the not-for-profit, fully tax-pay­ing AAA has been a leader and ad­vo­cate for the safety and se­cu­rity of all trav­el­ers. 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. AAA clubs can be vis­ited on the In­ter­net at AAA. com.

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