Even if you’ve never bought a vehicle, you must know that owning it will cost you more than just the price you pay when making the actual purchase, right? In fact, as car owners must already know, when it comes to North America, besides a house, a car is the most expensive item for a family to own. But, does the brand you choose when buying a vehicle play a part in how much money you will need to pour into it over the course of your owning career? Stick with us to find out!
There are 2 types of costs you need to take into account when it comes to owning a car – fixed (total purchase price, finance or interest costs, sales taxes, car insurance, license and registration fees, depreciation) and operating costs (fuel and vehicle maintenance/repair costs, parking fees).
Your total purchase price depends not only on the car make and model, but also on the way it is shipped to you – the so-called Destination and Delivery Costs (D&D for short), whether the car is in high or low demand (Market Adjustment), admin or processing fees, purchase taxes, just to name a few. Car insurance premium is determined by not only the type of car you choose to buy (faster and more extravagant vehicles cost much more to insure than average family vehicles), but also your driving record, insurance history and address (the neighborhood you drive your car in). When it comes to license and registration fees, they come down to $20 for the permit or $40 for the vehicle permit with license plates plus your license plate sticker – $108 in Southern Ontario and $54 in Northern Ontario. As far as the biggest point here is concerned – depreciation (the loss in value of the vehicle over its useful life), the costs depend largely on the type of vehicle you choose to buy, but also on the mileage and the condition of the car. According to Edmunds.com, a vehicle on average:
1) Loses 11% of its value when it leaves the lot as new
2) Loses 15-25% of its value per year in the first 5 years
3) Is worth 37% of what you originally paid 5 years before.
Fuel costs will be the second biggest cost of vehicle ownership (after depreciation) and are contingent on vehicle fuel efficiency, how many kilometers you drive annually, whether you drive in the city or on the open road and the price of fuel. For example, Hyundai consumes between 4.2 and 13.9 L/100km in the city and between 4 and 10.8 L/km on the highway, while BMW spends between 7.8 and 17.7 L/100km in city driving and between 5.9 and 12.1 L/100km on the open road – according to the Government of Canada.
When you combine these costs, the average Canadian pays between $8.600 and $13.000 per year to own a car!
Some estimate that people in Canada and the US spend 5% of their income on purchasing a car and another 5% on its maintenance. However, bear in mind that not every vehicle brand cost the same to own, and certainly, they all carry different risks of stopping when you least expect it.
According to YourMechanic.com, the vehicle maintenance costs rise significantly up to the 100.000-mile mark after which they tend to decline to the point of vehicle average. This is actually the moment when the car owner decides if the amount of money they have invested in the freshly purchased car has exceeded its value, so they either stick with it or upgrade to a newer vehicle.
As is to be expected, entry-level brands like Hyundai, Toyota, and Honda are on the cheaper end, while high-end brands like Mercedes-Benz and BMW are among the most expensive. Since their maintenance costs are 3 times higher than the others, those of you who want luxury and performance in a car, need to be ready to pay for it.
As you can see, certain brands have changed their positions on the chart when their maintenance costs are analyzed between 75.000 and 150.000-mile marks. Those that were inexpensive upfront – Hyundai and Kia – have higher maintenance costs with the increase in mileage. While BMW, Mercedes-Benz and similar high-end brands maintain their high-cost rank, Subaru, Toyota and Scion tend to have lower maintenance costs as they cover more miles.
However, given the fact that the average lifespan of a vehicle in North America is at least 10 years, this is the most relevant period to consider:
Toyota has emerged as the most economical brand when it comes to vehicle maintenance costs for the period of 10 years, while BMW and Mercedes-Benz hold their position of the highest maintenance cost vehicles. Those that ended up in the middle are Ford, Chevrolet and Dodge – surprisingly or not?
Considering the fact that Ford F-Series and the Dodge Ram Pickup (Ram P/U) hold the first and second place, respectively, as the bestselling vehicles in Canada in 2017, it is easy to deduce that their maintenance costs have had a great effect on their becoming the go-to cars to purchase.
With that in mind, what are the malfunctions that most often occur in vehicles (or what lights on your dashboard should you pay attention to)?
The most common maintenance issues include spark plugs, brake pads and batteries, which makes absolute sense given that these are all consumable parts with definite use ranges. Brake pads tend to give out at 50.000-mile mark, while it is 100.000 miles for spark plugs, which is when they should get replaced. Moreover, as the mileage on your car increases, less obvious fixes like the car failing to start and the Check Engine Light turning on become common maintenance issues as well.
Don’t wait for your car die on you – try to maintain it as regularly as possible. It will not only keep you safe on the road, but it will save you money in the long run regardless of your vehicle’s brand, make or model.