The truth about car: redux edition

So, last week I told you I was an incurable car nut. And I also promised to share some (hopefully insightful) nuggets about the true cost of car ownership.

Well, without further ado, here they are—the nuggets of course. (Click to zoom)

Anual Ownership Costs
A couple of details:

  • In the interest of consistency, I standardized the cost of fuel and financing, pegging the price of fuel at $1.22 per liter and imputing 5% financing for each vehicle (financing costs were imputed even for those cars actually bought outright);
  • Also, remember that, depending on factors such as age, geography and other assorted demographics, your actual costs—including insurance and such—may differ from those denoted here.

OK, so.  What does the data reveal?

Start by taking a peek at the total annual costs. Notice that, if you exclude the Sienna, the difference in ownership costs for the remaining three cars is relatively insignificant. Only $925 per year (just $77 per month).


Notwithstanding that one car was purchased new and two were previously owned (the Accord was 7 years old and the Mazda just 3 when purchased), what they share in common is:

  • They are inexpensive cars;
  • They are highly rated in terms of reliability;
  • They all have four cylinder engines;
  • They tend to stick around for a long time (only the Accord has since been sold).

Bottom line then—if you don’t like to spend a ton of money on cars—consider those four aforementioned bullets as your car-purchasing mantra.

Which means that your ownership costs will clock in at $5-6K. Each and every year.

Yeah but, I want more

Oh, so you want something bigger, something comfier?

Oh my, so roomy!

Well look at the Sienna’s cost analysis and you’ll find that there’s a price to be paid for bigger and more comfortable. Even though it stayed “in the fleet” for more than eight years, the Sienna’s cost averaged about $8,000 for each of those 8 years. That’s a lot of dough. Comparatively speaking. And it would have been higher still had the car been disposed of earlier.

So why? Why did the Sienna cost two grand more per year than the next most expensive car?

Two reasons. Mostly.

  • Depreciation is reason number one. Look at the costing table, $3,000 per year in lost value. Each and every year. What would you do if your investments lost $3,000, every year? Yeah, I know. I’d scream blue-murder too.
  • Then there’s fuel. With its six-cylinder engine and its hefty curb weight, the Sienna is much thirstier than all the other cars here.

So, let’s get this straight. It costs $8,000 per year to own a $30,000 car? And maybe $5,500 to own a smaller, less expensive car? That’s, like, an extra $2.5 grand a year?

In a nutshell, yeah.

Wow, just imagine what a $40 grand car would cost. Or a $50, or 60, or 70-grand car!

No, no. I said “More!” Not, “More expensive.”

Yeah, but… What if you don’t want to drive what some might consider a “penalty box”? What if you don’t want to be seen in—heaven help us—a bleeding mnivan.  What if you want something a little fancier, a little snazzier or a little less likely to break down?

Valid questions, I suppose. Especially that final one, as a quick peek at the Accord’s repair history will attest. (It did, after all,  require almost twice as much service as any other car on the list).

And, what if you want all that, without raiding the kiddies’ piggy bank?

Cash Rules

Alright then. If small, to you, means even smaller pleasure (now, now, don’t let your mind wander too far on that one, OK?). If a minivan, to you, equates with uncool.  And, if visits to a service bay are as enticing to you as that annual visit with your tax accountant (hey wait a minute! That’s me!). Then consider these two options.

Option 1

We said fancier, we said snazzier, right?
Then lease.
Yes, I said, “lease”.
Check this out.

Kia Optima

You can, right now, lease a brand new, base-model Kia Optima for four years for only $325 per month. By my calculations—all in—that car will average $6,900 per year.
Plus, it’s brand new. Plus, it’s got a warranty.
Not bad, eh?

But, then what?
Then, when the lease expires, lease another one. Or lease something else for that matter. If you’re not big on brand loyalty, odds are that you’ll find another lease—spanking new by the way, please don’t ever lease used—for about the same price.
That way, rather than being an owner, you simply become a renter. All for pretty darn close to the same price anyway.

(Caution! If you do go the leasing route, be aware of all the terms and conditions, especially regarding lease returns).

Option 2

But what if you are, like me, a lifelong gearhead? A 100% bona fide addict?
Then do your homework, shop around, visit a lot of dealerships, and wait for one of those, “They made me an offer I couldn’t refuse” type of deals.

That’s what I did when I landed my most recent purchase, a prior-model-year-but-still-almost-brand-new BMW, with only 300 clicks on the clock. Hey, we’re car nuts, right? And as a car nut, I’m sure you agree that everyone should, at least once in their life, own a BMW.
What? You don’t?
Oh never mind. Just read on.


Per my calculation, this sweet-running 3-series will cost me $7,004 per year. Which is, you know, only $100 more than the leased car under Option 1.

Why only $7K per year? Well, because of certain provisos, not to mention certain benefits. Which are:

  • At time of purchase the car still had its original manufacturer’s warranty;
  • The purchase price included a two-year extended warranty that kicks in after the the original one expires;
  • The car comes with four years’ service. Absolutely free.

And lastly, the provisos. Which are:

  • I pretty much have to commit to the car long-term.
  • Meaning ten years.
  • At least.
  • And, I have to dispose of the Mazda. Or the Matrix.
  • Or both.
  • Not sure, yet. But, one of them, at least, has to go.

And if it is the Mazda, well, after its faithful (not to mention, exuberant) service these past eleven years, that will leave me somewhat saddened, if not downright brokenhearted. But as they say, back in my hometown, “No use crying over spilled Labatt 50.” (Yeah, we say that, but we say it in French).

By the way, if you are looking for a vehicle of the used persuasion, contact me, about either car, and I’ll send you the deets.

So, dear reader.
As the great Howie Meeker often said, “Keep your stick on the ice.”
Which, to me, simply means, “Drive a nice car, yes. But never, ever, overpay.”

(Yeah, I know. Tenuous. At best.)



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