Which Brands Shine in KBB’s Lowest Ownership Cost Rankings?

In Kelley Blue Book’s rankings of car brands with the lowest five-year ownership costs released Monday, two Korean brands, in particular, received some encouraging news. KBB ranked Kia as the top-rated non-luxury brand for lowest total cost of ownership, and Hyundai came in second.

The average five-year ownership cost for Kia is $38,884, with Hyundai at $40,092. Honda was third ($40,862) on the non-luxury side.

“For non-luxury brands, Kia and Hyundai have a number of successful redesigns, greatly improved quality and competitive pricing, which sets them apart from other non-luxury brands in terms of cost of ownership,” officials shared.

“Key Kia models contributing to the brand’s low total cost of ownership include the Rio, Optima and Forte. Additionally, Honda continues to be a reliable choice with strong fuel economy and customer loyalty,” they added.

KBB considers a variety of factors in determining Total Cost of Ownership, but the most influential is depreciation, with fuel costs in second. Depreciation costs are based on KBB Residual Values.

“The average vehicle typically maintains about 30 percent of its original MSRP after five years of ownership, whereas a handful of vehicles maintain more than 45 percent after the same time period,” said Eric Ibara, KBB’s director of residual value consulting.

“The new total cost of ownership data on Kbb.com is based on Kelley Blue Book Residual Values, which are used by banks and manufacturers nationwide," he added.

On the luxury side of the market, Audi topped the list ($68,866) with Lexus in second ($73,605). Cadillac was at No. 3, and its five-year ownership costs average $77,680.

Audi and Lexus were lifted by the fact that their depreciation levels are the luxury market’s lowest, and their fuel economies are the strongest, KBB noted.

What’s more, Audi, Cadillac and Lexus typically have lower-priced models than their competitors.

“Combined with their entry-level vehicles, these brands stand out among their competitors for having low overall ownership cost,” analysts stated.

“Audi’s Total Cost of Ownership success is primarily driven by the A3 2.0T and A4 2.0T sedan models,” they added. “Both edge out competitors with their minimal depreciation and stellar fuel economy.”

KBB provided the following charts to illustrate the ownership costs further: