It helps to pay less at the pump - a major reason why overall operating costs have declined, says AAA.
At a time when prices seem to be going up for almost everything, here’s a pleasant surprise: the cost of owning and operating a car actually is expected to be down a bit this year, or so shows a new study by the AAA.
The typical vehicle will still take a hefty chunk out of your budget, an average $8,876, notes the organization’s “2014 Your Driving Costs” study. But that was nonetheless about 2.7% less than what ownership and operating costs averaged last year.
“A large decrease in fuel costs, and lower tire, insurance and depreciation expenses are saving owners more than one and a half cents on every mile they drive,” said John Nielsen, AAA Managing Director of Automotive Engineering and Repair.
And when you consider that the typical American driver logs 15,000 miles annually, that begins to add up. Total costs cam to 59.2 cents per mile last year, down 1.64 cents from the 2013 study.
Fuel costs have become one of the single most expensive parts of the equation, and are expected to come to an average 13 cents per mile – but that is a 10% decrease for the typical owner as fuel prices tumbled to around $3.28 for a gallon of regular no-lead. A surge in fuel prices in recent weeks could actually mean the new study is underestimating what motorists will spend this year, however.
The Driving Costs survey bases its fuel price calculation on what motorists around the country were paying, on average, during the final three months of the year. Fuel prices aren’t the only factor in lowering motorists’ gas bills, however. Drivers have also been benefitting from the steady improvement in vehicle fuel economy, AAA officials noted.
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A surprisingly wide number of other factors contributed to the decline in ownership and operating costs. The latest AAA study shows a 1.71% decline in vehicle depreciation – which the study shows averaging $3,510 for the average vehicle, down from $3,571 in last year’s study. The study cites the appeal of “very desirable redesigned models.” The fact that used car prices have surged over the last year certainly plays a role in declining depreciation.
Tire costs also are down about 3% in the latest study. Give credit to automakers who apparently are equipping many of their vehicles with less expensive rubber. But tire prices, in general, have been coming down after several years of sharp increases in rubber and other raw material prices.
Even insurance premiums are down, albeit a modest 0.58%, according to the new AAA study. A typical U.S. motorist can expect to write a check for $1,023 to cover a year’s premiums, a $6 annual decline. But beware, stresses the organization, as insurance rates “vary widely by driver and driving record, issuing company and geographical region.” In fact, rates will vary a fair bit from vehicle to vehicle. Small and medium sedan saw the biggest decline in the new study, but premiums rose for many larger sedans.
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Driving expenses overall vary widely depending on the type and size of the vehicle you own, AAA noted. While it might cost 59.2 cents per mile to operate the “average” sedan – or $8,876 annually – that jumps to 65.0 cents per mile, or $9,753 overall, for a minivan, and 73.6 cents per mile, or $11,039 for a four-wheel-drive SUV.
At the other end of the automotive spectrum, AAA said a small sedan will run just 46.4 cents per mile to own and operate, for an annual total of $6,957.
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The “Your Driving Costs” study has been published by AAA since 1950, and back then, the typical motorist clocked 10,000 miles per year at a cost of 9 cents per mile. Gasoline, that year, sold for 27 cents per gallon, on average, in the U.S.