AAA: Depreciation Costs Dip 5 Percent, Help Offset Rise in Sedan Ownership Expenses
A slowdown in depreciation expenses has helped to mitigate the rise in sedan ownership costs this year, according to AAA’s 2012 Your Driving Costs study released Friday.
That said, the nearly 5-percent ease in depreciation costs didn’t entirely prevent an ownership cost hike altogether.
AAA has found that the average cost per mile to own and operate a sedan is 59.6 cents, up 1.9 percent from 2011. The cost-per-mile translates to a yearly cost of $8,946.
“The average driving cost for 2012 is up due to relatively large increases in fuel and tire costs, and more moderate increases in other areas,” explained John Nielsen, AAA director of automotive engineering and repair. “Those increases were offset by a decrease in depreciation resulting in an overall increase of 1.9 percent.”
AAA gathered information for this study through its auto buying and repair analysts, who examined the driving costs for small, medium and large sedans. These analysts determined the costs based on the five best sellers (as selected by AAA) in each of these three segments. AAA assumes that the car is driven 15,000 miles annually.
AAA noted that SUV and minivan data are not part of the composite average, but it offered specific details on costs in these segments as a reference.
The study took into account variable costs — including fuel, maintenance and tires — as well as fixed costs, including insurance, license and registration fees, taxes, depreciation and finance charges.
Explaining more about the influence of deprecation costs, officials noted that it fell 4.9 percent.
“Depreciation costs were up slightly in 2011, but for 2012 the trend has reversed withdepreciation falling across the board by nearly 5 percent,” officials explained. “This change may be a consequence of reduced new-car sales over the past few years, which has resulted in a relative shortage of good used cars on the market, driving up their value.
“This is good news for those in the resale market as their vehicles will retain a greater portion of their purchase cost,” they added.
The most dramatic increase was in the cost of fuel, which climbed 14.8 percent year-over-year.