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May 21, 2013 02:00 AM

Vehicle ownership cost up 2% in past year — AAA

Tire Business staff
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    ORLANDO, Fla. (May 21, 2013) — The cost to own and operate a sedan in the U.S. went up nearly 2 percent in the past year, according to AAA Inc.'s annual "Your Driving Costs" study, although the cost of tires did not change.

    According to the motorist club's report — its 63rd annual vehicle cost study — vehicle operating costs rose 1.17 cents to 60.8 cents per mile, or $9,122 per year, based on 15,000 miles of annual driving.

    "Many factors go into the cost calculation of owning and operating a vehicle," said John Nielsen, AAA director of automotive engineering and repair. "This year, changes in maintenance, fuel and insurance costs resulted in the increase to just over 60 cents a mile."

    The findings of the 2013 Your Driving Costs study include a breakdown of specific costs by category of vehicle and various annual mileages.

    AAA Inc. photo

    John Nielsen, director of automotive engineering, AAA Inc.

    "Before you make any vehicle purchase, it is important to determine ownership and operational costs and compare them to your current and future financial situation," Mr. Nielsen continued.

    To assist consumers in determining their individual driving costs, AAA is offering a "Your Driving Costs" brochure containing a worksheet that can be filled out and personalized for a specific area, driver and vehicle.

    AAA said costs associated with maintaining a vehicle had the single largest percentage increase from 2012 to 2013, growing 11.3 percent to 4.97 cents per mile on average for sedan owners. The group's estimates are based on the cost to maintain a vehicle and perform needed repairs for five years and 75,000 miles — including labor expenses, replacement part prices and the purchase of an extended warranty policy.

    (AAA photo)
    The AAA's 2013 "Your Driving Costs" study includes a breakdown of specific costs by category of vehicle and various annual mileages.

    AAA figured the average cost of driving for five vehicle categories — small sedan, medium sedan, large sedan, SUV/4WD and minivan.

    Of these, the SUV is the most expensive to maintain at 77.3 cents per mile, or $11,599 a year, AAA said. The least expensive is the samll sedan at 46.4 cents a mile, or $6,967 a year.

    The large sedan is right on the SUV's tail, however, at 75 cents a mile.

    What has driven the increase in maintenance costs, according to AAA, is "significant increases in labor and part costs for some models and a major increase in the price of extended warranty policies due to high loss ratios by underwriters"

    Gasoline prices were relatively stable compared with the prior year, AAA said, leading to a minimal fuel cost increase of 1.9 percent to 14.5 cents per mile on average for sedan owners. The average cost of regular grade fuel (used by most of the study vehicles) actually rose 3.84 percent, to $3.49 a gallon from $3.36. However, several vehicles in the study had small improvements in their fuel economy ratings, partially offsetting the fuel cost increase.

    Fuel costs in the 2013 study were calculated using the national average price for regular, unleaded gas during the fourth quarter of 2012.

    When AAA published its first "Your Driving Costs" study in 1950, driving a car 10,000 miles per year cost 9 cents per mile and gas sold for 27 cents per gallon.

    The cost of tires did not change from 2012 to 2013, remaining at 1 cent per mile on average for sedan owners, according to the motorist group, which attributed the stable price to a "leveling off of past increased costs for raw materials, energy and transportation from factories to distributors across the country."

    Average insurance costs for sedans rose 2.8 percent (or $28) to $1,029 annually. AAA said insurance rates vary widely by driver and driving record, issuing company and geographical region. AAA insurance cost estimates are based on a low-risk driver with a clean driving record.

    Insurance quotes from five AAA clubs and insurance companies representing seven states showed across-the-board modest increases for all sedan sizes, with large cars having less of an increase than small- and medium-size sedans.

    After seeing a drop in 2012, depreciation costs were up slightly in 2013, increasing 0.8 percent to $3,571 a year, AAA reported. The change may be a consequence of recovering new vehicle sales, it said, resulting in more used cars available in the marketplace and thus the softening of the resale value of clean older models.

    AAA said its study employs a proprietary methodology to analyze the cost to own and operate a vehicle in the U.S. 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.

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