Many people are grumbling about gas prices these days, but how often do they think about the total cost of owning their vehicle?
AAA thinks about it once a year: Its annual driving costs study came out last week and concluded it costs almost $9,000 a year to drive the average sedan (something like a Honda Accord) and more than $11,300 to drive a larger sedan (say a Nissan Maxima) or SUV. That’s assuming 15,000 miles per year.
A big chunk of that pays for insurance. AAA says average insurance costs for mid-size sedans rose 3.4 percent since last year. But despite that, fewer people are comparing rates – only 1 in 4 insurance customers have shopped around in the past year, according to a J.D. Power and Associates study released this week. That’s a five-year low.
How come? JDP’s Jeremy Bowler says it’s “perhaps a direct result of the lower typical savings derived from switching, which has decreased to only $359 in the past 12 months.”
So are people lazy because they could only save an extra $359? Earlier this year, Money Talks News did a story called 6 Steps to Pay Less for Car Insurance – you can check out the details at the link or just catch a summary in the video below, then find more ways to cut driving costs on the other side…
JDP says 43 percent of car owners who bothered to compare rates actually switched insurers – the highest percentage in four years. But AAA’s study estimates that only about 11 percent (roughly $1,000) of the cost of driving comes from your coverage. Here are four other ways to save…
When AAA started doing the annual survey in 1950, gas cost 27 cents per gallon. But since last year, “The average cost of regular grade fuel (used by most of the study vehicles) rose 16.6 percent, from $2.880 to $3.357 per gallon.” Want to conserve gas? Check out The 4 Best Ways to Improve Gas Mileage.
The cost for tires rose 4.2 percent since last year, mostly because of higher rubber costs, AAA says. Just a couple of weeks ago, we offered 6 Tips for Saving on Tires, including making sure it’s actually time to replace them (6 to 10 years when properly cared for) and never buying used.
While “never buy used” is good advice for tires, we recommend the opposite when it comes to the car itself – as we did in 8 Tips for Buying a $5,000 Car. But AAA reports that new cars are actually holding their value better than they were a year ago: Depreciation is down almost 5 percent. Why? AAA speculates “reduced new car sales over the past few years has resulted in a relative shortage of good used cars on the market.” So when it’s time to sell, take advantage of 10 Tips to Sell Your Car for More.
AAA says maintenance costs were also up slightly since last year: 0.7 percent. But that doesn’t mean you should skimp on repairs, because mechanical problems tend to get more expensive the longer you wait, and good service records can help you sell your car for more. Worried about paying for unnecessary repairs? Learn about New Tools for Do-It-Yourself Car Diagnosis.
And if you think leasing is a smart way to lower your ownership costs, you might think again after reading Should You Buy or Lease Your Next Car?