patrick.net

Access the premium content on this site.

New to the study in 2017, AAA found that electric vehicles have lower-than-average driving costs at $8,439 per year. Without a gasoline engine to maintain, electric vehicles have the lowest annual maintenance and repair costs, at $982 per year.
By relying on electricity instead of gasoline, fuel costs are also significantly lower than average, at under four cents per mile.

Hey Captain, how much does your gas guzzling, belching, smoking, sputtering, coughing, polluting, gasmobile cost you per mile?

AAA: The true cost of vehicle ownership

LOS ANGELES
August 23, 2017 6:09am

• Average for a new car is nearly $8,500 a year
• “Determining the cost of a new vehicle is more than calculating a monthly payment”

Owning and operating a new vehicle in 2017 will cost a driver an average of $8,469 annually, or $706 each month, according to a new study from AAA. In addition to analyzing the ownership costs for sedans, SUVs and minivans, AAA’s study added four new vehicle segments in 2017 -- small SUVs, pickup trucks, hybrids and electric vehicles. The annual evaluation of driving costs reveals that small sedans are the least expensive vehicles to drive at $6,354 annually. However, small SUVs ($7,606), hybrids ($7,687) and electric vehicles ($8,439) all offer lower-than-average driving costs to U.S. drivers. Conversely, of the nine categories included in the evaluation, pickup trucks are the most expensive vehicles to drive at $10,054 annually. “Determining the cost of a new vehicle is more than calculating a monthly payment,” says Automobile Club of Southern California Automotive Research Manager Megan McKernan. “While sales price is certainly a factor, depreciation, maintenance, repair and fuel costs should be equally important considerations for anyone in the market for a new vehicle.” New to the study in 2017, AAA found that electric vehicles have lower-than-average driving costs at $8,439 per year. Without a gasoline engine to maintain, electric vehicles have the lowest annual maintenance and repair costs, at $982 per year. By relying on electricity instead of gasoline, fuel costs are also significantly lower than average, at under four cents per mile. Depreciation, however, is currently extremely high for these vehicles, losing an average of nearly $6,000 in value every year. A recent AAA survey revealed that 1-in-6 Americans are likely to choose an electric vehicle, the majority motivated by their lower long-term ownership costs. “Although electric vehicles can have higher up-front costs, lower fuel and maintenance costs make them a surprisingly affordable choice in the long run,” says Ms. McKernan. “For even lower costs, car shoppers can avoid high depreciation costs by selecting a used electric vehicle.” She adds that fuel prices are also influencing more green-car buyers. “Lower gas prices continue to be a boon for green-car buyers – when lots of people are buying large cars and light trucks due to falling fuel prices, dealerships are more likely to offer incentives to attract buyers to ‘greener’ fuel-efficient models,” she says.

Other Key findings

• Depreciation -- the declining value of a vehicle over time -- is the biggest, and most often overlooked, expense associated with purchasing a new car. New vehicles lose an average of $15,000 in value during the first five years of ownership. In 2017, small sedans ($2,114) and small SUVs ($2,840) have the lowest annual depreciation costs, while minivans ($3,839) and electric vehicles ($5,704) are at the high end of the scale.
• To calculate annual maintenance and repair costs, AAA examined factory-recommended maintenance, replacement tires, extended warranty costs and services associated with typical wear-and-tear. New vehicles, on average, will cost a driver $1,186 per year to maintain and repair.
The inevitable costs associated with maintenance and repair should be an important consideration for car shoppers, as a recent AAA survey found that one-third of U.S. drivers could not afford an unexpected repair bill.
• Fuel costs vary significantly by vehicle type, ranging from 3.68 cents per mile (electric vehicles) to 13.88 cents per mile (pickup trucks). New vehicle owners, on average, will spend just over 10 cents per mile – about $1,500 annually -- to fuel their vehicles. For gasoline-powered vehicles, AAA recommends selecting a “top tier” gasoline, as its independent research found it to keep engines 19 times cleaner, improving vehicle performance and fuel economy. AAA cautions drivers that using premium-grade gasoline in a vehicle that does not specifically require it is an unnecessary expense.

About the data
To estimate the overall cost to own and operate a new vehicle, AAA evaluated 45 2017 model-year vehicles across nine categories and focused on mid-range, top-selling vehicles. AAA’s annual driving cost is based on a sales-weighted average of the individual costs for all of the vehicle types. AAA’s study employs a proprietary methodology to analyze the costs of owning and operating a new vehicle in the United States, using data from a variety of sources, including Vincentric LLC.

P N Dr Lo R says

electric vehicles ($5,704) are at the high end of the scale.

$10,000 rebates more than cover the depreciation. After you factor in the rebates, electric cars are cheaper to own by far.

• Fuel costs vary significantly by vehicle type, ranging from 3.68 cents per mile (electric vehicles) to 13.88 cents per mile (pickup trucks). New vehicle owners, on average, will spend just over 10 cents per mile – about $1,500 annually -- to fuel their vehicles.

----------------------------

maybe i didn't get enough sleep, but it feels like their calculations are misleading, at least wrt depreciation.

Wouldn't that only matter in the event that you consider the car some sort of investment?

A car is just a consumption item. If you buy a brand new car, and finance it at 0%, your costs are

Principal Repayment
Insurance/registration/taxes
Maintenance
Fuel costs

Once it's all paid up, it's all used up, and you can sell it to the junk yard for 1$. To consider depreciation a full on cost, in addition to principal repayment, is misleading, no? Or am i just stoned as a kite today?

errc says

Principal Repayment
Insurance/registration/taxes
Maintenance
Fuel costs

Once it's all paid up, it's all used up, and you can sell it to the junk yard for 1$. To consider depreciation a full on cost, in addition to principal repayment, is misleading, no? Or am i just stoned as a kite today?

Calculations for cost of ownership of a car includes depreciation, but not the payments if any. Otherwise you are double counting.

Calculations for cost of ownership of a car includes depreciation, but not the payments if any. Otherwise you are double counting.

-------------

I guess I've been doing it wrong.

Maybe I'm looking at cost per mile rather than cost of ownership, but I don't really see my cars as capital goods, rather than transportation as a consumption item.

Or maybe I just didn't get enough sleep

errc says

I guess I've been doing it wrong.

Maybe I'm looking at cost per mile rather than cost of ownership, but I don't really see my cars as capital goods, rather than transportation as a consumption item.

You will find this site particularly interesting. The lease cost per mile for electric cars in California based on advertised prices.
Leases include the federal rebates, but not the state rebate. You get that separately in cash. $2,500 California rebate.
No way on earth can a regular car compete.
Hey Captain......are you listening?

http://ev-vin.blogspot.com

Strategist says

No way on earth can a regular car compete.

Yes it can. I can drive 400 miles on a tank of gas and refill in less then 10 minutes and then drive another 400. When you run out of juice in an electric, you get to sit for awhile.

mmmarvel says

Yes it can. I can drive 400 miles on a tank of gas and refill in less then 10 minutes and then drive another 400. When you run out of juice in an electric, you get to sit for awhile.

This is true for road trips. But for everyday driving, most people fill up 30 times a year. At 10 minutes a pop (including going to the station), that's 300 minutes or 5 hrs. The electric car driver just plugs in when they go home. They have to park in the same place each time, but they can save most of 5 hrs a year. They can also probably save some more time getting preferred parking here and there.

New vs. new, maybe. Slightly used gas vs. new EV (to get the rebates) and the slightly used gasser is going to beat it all day.

Used $11k Nissan Versa: https://www.carmax.com/car/13801736
Probably could get it cheaper elsewhere. But it's 10k miles.

MSRP on a leaf is $30k: https://www.nissanusa.com/electric-cars/leaf/
Obviously you'll come in under that for the base model, but not a whole lot. Fed rebate puts you around $22,500. IF your state has a rebate, you're around $20k. Both of these cars are the same from what I recollect except for some minor body design changes and the electric vs gas motor.

Where is the Leaf going to make up $8-9k on the purchase price? I make some other assumptions below about the cost. My assumptions are based on owning the car for 5 years, financed. Nothing to do with resale values. But we're already at a $1,600/yr deficit for the Leaf based on purchase price.

Financing costs (Note: You have to factor this in, in my opinion. If you're paying cash, you're losing the opportunity to invest that $8-9K spread between the Versa and Leaf. So I think showing the financing route equalizes that aspect):
Versa @ $11k, 5 year loan term, 5% interest: $208/mo
Leaf @ $30k minus $10k for rebate - $20k loan, 5 year loan term, 5% interest: $377/mo
Yes I know there are fees, etc. This is just a simple version. The taxes are going to be higher on the Leaf since it's based on the purchase price. So doing this simple actually benefits the Leaf in my numbers. Yes you'll get the rebate, but again there's time value to money while waiting for that rebate to come. I'm also pricing the loan at $20k, when in reality it would be based on the purchase price and you get the rebate later (not including down payments, again to simplify).

$377-$208=$169/mo cheaper for the used Versa. So based on price alone, the Versa is already ahead $1,600/yr (again, 5 year timeline). Throw in the financing cost of owning the car and the used Versa saves an additional $2,028/yr. So used Versa is up $3,628/yr out of the gate, cheaper than the leaf.

If you have a high voltage charger at your house, great. Most people are going to have to drop close to $2k if they're hiring a contractor to install new electric so you can optimally charge the car. I won't include this in the annual costs, but it has to be considered.

Now onto where the EV shines. Cost per mile. Since I hate math, I'm just going to go off this line from this site: https://energy.gov/articles/egallon-how-much-cheaper-it-drive-electricity

On average, it costs about half as much to drive an electric vehicle.

So let's assume both cars will drive the same miles. Gas car needs to fill up 15 gallons per week @ $3.00/gal. 15 gallons X $3=$45 per week. $45/week X 52 weeks = $2,340/yr. EV uses 50% less, so it will save $1,170/yr on gas. If you drive more than that, sure you'll have even more savings. But, remember you are limited with the EV (at least this one) for distances driven between charges. So you're essentially capped on savings for gas due to time.

Tires and brakes don't count towards the maintenance. So it's oil changes and things related to the gas car that can break, but wouldn't break on a EV. So we started out with the EV actually costing $3,629/yr more off the lot vs. a slightly used gas car that's essentially the same design. Subtract out the savings for gas and the EV still needs to make up $2,459/yr.

I'm sure there's a flaw in my write up or reasoning. Feel free to point it out and destroy me. But I don't see the advantage of getting an EV for the tax credits, when a slightly used gasser is going to be significantly cheaper, even for a lemon that needs constant repair (to the tune of $2,500/yr for oil changes and repairs). I see your point more with new EV vs new gasser. And I would personally buy an EV for the right price, but until it can beat a slightly used car I don't see the masses flocking to EV's. I also know there are better EV's than the Leaf, but I've owned a Versa and personally know it would be WAY cheaper to get the slightly used one vs a new Leaf. The Leaf also wouldn't fit my needs of having to drive more than 150 miles on a single charge or short road trips to vacation.

mmmarvel says

Strategist says

No way on earth can a regular car compete.

Yes it can. I can drive 400 miles on a tank of gas and refill in less then 10 minutes and then drive another 400. When you run out of juice in an electric, you get to sit for awhile.

Yes, there is the range anxiety and slow charging, but newer and faster chargers are on the way.
From the monetary point of view gasmobiles just can't compete.

WookieMan says

New vs. new, maybe. Slightly used gas vs. new EV (to get the rebates) and the slightly used gasser is going to beat it all day.

That's comparing apples with oranges. Not fair.

How many years before replacing battery cost blows that up? You should consider that.

There is required battery replacement date, and it isn't a 60$ autozone battery.

I think these cars in 5 years or so will be solid, given time to work out unknowns.

Strategist says

New to the study in 2017, AAA found that electric vehicles have lower-than-average driving costs at $8,439 per year. Without a gasoline engine to maintain, electric vehicles have the lowest annual maintenance and repair costs, at $982 per year.
By relying on electricity instead of gasoline, fuel costs are also significantly lower than average, at under four cents per mile.

Hey Captain, how much does your gas guzzling, belching, smoking, sputtering, coughing, polluting, gasmobile cost you per mile?

Strategist says

That's comparing apples with oranges. Not fair.

I'd say it's more like comparing granny smith apples to golden delicious apples. Fortunately (or unfortunately for some perspectives), there are a lot of used car options. Until a new EV can compete with slightly used cars, it's going to be hard of the EV to gain majority popularity. Or the EV's start to show that they can get to 300k-400k miles with substantially less maintenance costs. Ultimately it's sticker price hold them back. If EV and gasser cost the same AND perform the same, EV will take over.

5% interest on an auto loan? Wtf

errc says

5% interest on an auto loan? Wtf

Literally was just throwing out a number. Don't do financing on vehicles myself unless it were zero. I just found a calculator and that was the default interest rate, hence the number thrown out. I have heard of some people paying 9-12%, so it's not a totally shocking number. I might look into it further, but I'd be shocked if the average current interest rate on an auto loan across the country was under 5%. Median would be better, but I'm betting half of people with financed cars are paying 5% plus. I don't know if I'm right, but have a feeling I am. Going to look into it.

YesYNot says

mmmarvel says

Yes it can. I can drive 400 miles on a tank of gas and refill in less then 10 minutes and then drive another 400. When you run out of juice in an electric, you get to sit for awhile.

This is true for road trips. But for everyday driving, most people fill up 30 times a year. At 10 minutes a pop (including going to the station), that's 300 minutes or 5 hrs. The electric car driver just plugs in when they go home. They have to park in the same place each time, but they can save most of 5 hrs a year. They can also probably save some more time getting preferred parking here and there.

Lol, what an angle, never heard someone argue that one before

#REACHING

FortWayne says

How many years before replacing battery cost blows that up? You should consider that.

There is required battery replacement date, and it isn't a 60$ autozone battery.

I think these cars in 5 years or so will be solid, given time to work out unknowns.

Batteries are guaranteed for 8 years 100,000 miles. Taxis that use the Prius have reported going well over 250,000 miles without a problem.
Besides, the cost for batteries are falling like a rock.

WookieMan says

I'd say it's more like comparing granny smith apples to golden delicious apples. Fortunately (or unfortunately for some perspectives), there are a lot of used car options.

So compare with used EVs then. '12-'13 Leaf with 30-50K miles on the odo can be had for $8K.

https://www.autotrader.com/cars-for-sale/Nissan/Leaf/Belmont+CA-94002?zip=94002&startYear=1981&numRecords=25&sortBy=derivedpriceASC&firstRecord=0&endYear=2018&modelCodeList=LEAF&makeCodeList=NISSAN&searchRadius=25

FortWayne says

There is required battery replacement date,

There is?

SpecialSnowflake says

So compare with used EVs then. '12-'13 Leaf with 30-50K miles on the odo can be had for $8K.

https://www.autotrader.com/cars-for-sale/Nissan/Leaf/Belmont+CA-94002?zip=94002&startYear=1981&numRecords=25&sortBy=derivedpriceASC&firstRecord=0&endYear=2018&modelCodeList=LEAF&makeCodeList=NISSAN&searchRadius=25

This is a good point. It does look like an average used Leaf is a decent deal in comparison to the Versa with similar miles and model year. I guess my issue or point was with the sales of new electric vehicles. It's hard for it (EV's) to take off when so many used gas vehicles will beat the cost of a new EV even with tax credits. My understanding is the Leaf is the same chassis and many of the same parts as the Versa. Why the $15-20K difference on price? Are batteries really that much more vs. gas engines? Or is it priced high because of the tax rebate? I'm all for less emissions, but this might be a case of government getting in their own way to reduce emissions and the car companies taking advantage of it.