A new study from AAA shows that the largest expense associated with purchasing a new car is depreciation. Depreciation accounts for almost 40% of the cost of owning a new vehicle and equals more than $3,000 per year.
AAA urges car buyers to think about both market trends and length of ownership when shopping for their next vehicle purchase.
AAA’s annual analysis found demand for sedans is down and as a result, depreciation costs for sedans increased up to 13% compared to last year.
Electric and hybrid vehicles have seen a rise in popularity with 20% of Americans saying they will likely go electric for their next car purchase. That's up from 15% the previous year.
Vehicle owners looking for alternatives to new car ownership or ways to minimize their operating costs should consider the following:
- Buy (gently) used – By driving a pre-owned vehicle in good condition, ownership costs are significantly lower.
- Fuel responsibly – Avoid wasting money on premium grade gasoline unless your vehicle specifically requires it.
- Show your car some love – Spending money on routine maintenance can actually save you money in the end.
- Slow down – When gas prices are high, small changes in the way you drive can make a big difference.