Gas Prices Are Only One Factor
Gasoline prices are rising again, but fuel is just one factor in the high cost of driving an auto. The average cost of driving a sedan 15,000 miles a year will cost you $8,698, or 58 cents per mile. You’ll spend 70.8 cents a mile, or $10,624 a year, to put 15,000 miles on an SUV with four-wheel-drive. These big numbers drive us to learn how to cut the cost of driving.
Many factors feed the cost of driving: financing, depreciation, maintenance, insurance, and driving habits.
Financing: Credit unions often offer the best rates on loans, but you also should compare the loan term, fees, and prepayment penalties. If the dealer offers a rebate, you may save more money by taking the rebate and financing at Mid Oregon Credit Union than taking the low-rate loan.
Depreciation: Depreciation is usually the largest part of the cost of driving: AAA estimates the average annual depreciation on a medium sedan driven 15,000 miles per year at $3,654. Kelley Blue Book says that after five years, the average car is worth 35% of its sticker price. But some cars, especially Honda and Toyota, have much lower depreciation. Ignoring the current value of a used car can put you “upside-down” if you trade the car and pay off the loan: You owe more on the car than it’s worth.
Maintenance and repair: AAA estimated the maintenance costs of sedans at 58.9 cents per mile in 2017. Maintenance costs varied widely by vehicle type but, on average, were up slightly from 2015.
Insurance: AAA estimated insurance costs for the average sedan at $1,115 per year in 2015, based on a low-risk driver with a clean driving record. Insurance for drivers who are male, younger than age 25, poor students, or have a record of moving violations and/or accidents is more expensive. Raising the deductible and reducing the maximum coverage can lower premiums but will increase your risk.
* Drive defensively. Try to stay off the road late at night when most accidents occur.
* Keep tires inflated to improve mileage and cut the chance of a blowout.
* Drive mild, not wild: Accelerating slowly and coasting up to stoplights can improve gas mileage up to 30%.
* Use the cruise control for highway driving to save 4% to 14% in gas.
* Drive less to save on gas, oil, maintenance, and deprecation. Think about carpooling, taking public transit, biking, or walking.