7 CATEGORIES OF COSTS
Depreciation
2. Financing
3. Insurance
4. Taxes & Fees
5. Fuel
6. Maintenance
7. Repairs
1.
Depreciation
This is the amount by which the value of a vehicle
declines from its purchase price. The purchase price
employed for new cars is the vehicle's True Market
Value® price in your state (including typical equipment
and destination charge) less any widely available
customer cash rebates. The purchase price employed
for used cars is the vehicle's Private Party True Market
Value® price in your state. The resale value assumes
the vehicle will be in "clean" condition, will be driven
an average of 15,000 miles per year, and will be sold to
a private party.
Financing
This is the interest expense on a loan in the amount of the
True Market Value® purchase price (including typical
equipment) plus the destination charge (for new cars)
and the base sales tax and initial fees for your state,
assuming a 10% down payment and a loan term of 60
months. The interest rate used is the prevailing rate
that banks and other direct automotive lenders are
charging consumers in your geographic region who are
in the Gold credit tier (which encompasses the majority
of the car-buying population).
Insurance
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This is the estimated average annual insurance premium being
charged by insurers in your state. The premium has been
determined based on industry-wide, state-by-state data from the
National Association of Insurance Commissioners (NAIC)* for all
makes, models, drivers, usage/mileage, etc. for the major
coverages (liability, comprehensive and collision), and vehiclespecific rating data from one of the country's largest insurance
companies.
While this information is specific to vehicle make, model, model
year and body type, your personal information is not taken into
consideration and could greatly alter the actual premium quoted
by an insurer. Factors that will affect your rate include your age,
marital status, credit history, driving record, and the garaging
address of your vehicle
Taxes & Fees
Sometimes referred to as DMV fees, this consists
of the base sales taxes, license and registration
fees in your state, and gas guzzler tax if
applicable. These taxes and fees are frequently
based on a percentage of the purchase price,
and generally decrease as the vehicle ages and
loses its value. Note that the average state
sales tax that we use includes local and county
taxes.
Fuel
This expense is based on EPA mileage figures,
assuming consumption consists of two-thirds
highway and one-third city driving, and that
the vehicle has an automatic transmission
unless automatic is not available. Cost
estimates are based on self-service prices,
using an average mix of two-thirds regular
grade and one-third mid-grade gasoline;
premium gasoline for vehicles whose
manufacturers recommend premium grade; or
diesel fuel for diesel models
Maintenance
This is the estimated expense of two types of
maintenance: scheduled and unscheduled. Scheduled
maintenance is the performance of factoryrecommended items at periodic mileage and/or
calendar intervals. Unscheduled maintenance includes
wheel alignment and the replacement of items such as
the battery, brakes, headlamps, hoses, exhaust system
parts, taillight/turn signal bulbs, tires and wiper
blades/inserts. Estimated tire replacement costs are
supplied to Edmunds.com by The Tire Rack, Inc.
Repairs
This is the estimated expense for repairs not
covered by the vehicle manufacturer's warranties
over the five years from the date of purchase,
assuming an average of 15,000 miles are driven
annually. This expense is based on the cost of a
typical "zero deductible" extended warranty for
the vehicle, minus the estimated amount of that
cost that consists of the warranty provider's
overhead and profit.
Fill in the following chart for a 2005
Chevrolet Impala
5 year total
Depreciation
Financing
Insurance
Taxes & Fees
Fuel
Maintenance
Repairs
Totals
5 YEAR TOTALS
5 year total
Depreciation
$16,446
Financing
$3,863
Insurance
$4,265
Taxes & Fees
$3,281
Fuel
$8,443
Maintenance
Repairs
Totals
$3,087
$732
$40,117
GRAND TOTAL FOR OWNING A NEW
CAR (5 YEARS)
True cost to own
$40,117
Cost of Car
$25,464
Grand Total
$65,581
Do you still want drive a car?
Consider the costs involved.
 Make intelligent decisions.
 Take care of your investment!
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