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 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!