In addition to a car's sticker price, do you know the six factors that make up the total cost of ownership?
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In addition to a car's sticker price, do you know the six factors that make up the total cost of ownership?

So you've shopped around and you've managed to narrow your choice to two or three cars, priced in the same ballpark and boasting similar features, but you're deadlocked as to how to choose between them. You're trying to be frugal, so you consider just going with the cheapest of the three, but something tells you that the decision isn't that simple.

There's more to the cost of owning a car than just paying the sticker price; in fact, the car with the lower sticker price might just turn out to be more expensive over the long haul. In other words, you might have the cash to buy a car, but not the income to afford to own it. That's the difference between price and total cost of ownership (TCO).

The total cost of ownership (over five years) includes six factors:

  • Depreciation accounts for 46 percent of TCO (the average model depreciates 65 percent).
  • Fuel costs mount up quickly -- especially for SUVs -- constituting 26 percent.
  • Interest varies according to vehicle price, but in a typical case (a five-year loan, 15 percent down, 6.4 percent interest), it accounts for 12 percent of TCO.
  • Insurancecosts vary according to age, location, driving record, vehicle make and model but on average account for 11 percent.
  • Maintenance and repairconstitute 4 percent of TCO on average.
  • Sales tax costs owners about as much as maintenance and repair, assuming the national average of 4.9 percent.

[Source: Consumer Reports]

Up Next

So which cars have the lowest cost of ownership? It's a complicated question and your circumstances may vary (especially if you include used cars in the mix), but here are some good candidates among 2010 vehicles, listed by manufacturer's standard retail price (MSRP) and estimated five-year TCO. The list also indicates the award-winners in their categories for 2010:

Make/Model MSRP TCO
Nissan Versa $11,990 to $16,530 $20,595 (also best compact car)
Toyota Yaris $13,405 to $14,165 $21,593 (also best subcompact car)
Hyundai Accent
$9,970 to $16,995 $22,664
Honda Civic $16,255 to $23,800 $22,779
Scion xD $15,600 $23,330 (also best compact wagon)
Honda Fit $15,700 to $17,260 $23,336
Toyota Corolla $16,250 to $20,150 $23,586
Toyota Prius $24,051 (also best mid-sized car) $24,051 (also best mid-sized car)
Nissan Cube $24,082 $24,082
Chevrolet Aveo5 $24,256 $24,256


[Sources: Automotive.com, Edmunds.com, IntelliChoice.com]

However, these cars are just the tip of the iceberg. Here are some examples of low-cost vehicles broken down by category:

Style
Make/Model MSRP TCO
Sports car
Volkswagen GTI 2.0T $24,070 $33,404 -- $2,658 less than similar vehicles
Compact pickup (2WD and 4WD) Toyota Tacoma Regular Cab $16,245 $26,134 -- $4,027 less than similar vehicles
Convertible MINI Cooper $24,250 $30,342 -- $4,515 less than similar vehicles
Luxury Convertible BMW 128i $34,200 $45,678 -- $698 less than similar vehicles
Full-size Hyundai Sonata GLS $19,900 $31,441 -- $2,080 less than similar vehicles
Luxury Car Audi A5 2.0T Quattro $37,200 $46,046 -- $6,535 less than similar vehicles
Minivan Mazda Mazda5 Grand Touring $23,240 $34,734 -- $1,123 less than similar vehicles
Full-size Pickup (Half Ton, 2WD and 4WD) Toyota Tundra Regular Cab $23,485 $36,098 -- $2,161 less than similar vehicles
Full-size Pickup (3/4 Ton, 2WD) Ford F250 Super Duty Regular Cab XL $25,875 $43,728 -- $143 less than similar vehicles
Full-size Pickup (3/4 Ton, 4WD) Chevrolet Silverado 2500 Regular Cab LT $33,410 $48,136 -- $84 less than similar vehicles
Full-size Pickup (One Ton, 2WD): Chevrolet Silverado 3500 Regular Cab LT $30,200 $47,190 -- $559 less than similar vehicles
Full-size SUV Jeep Commander Limited 2WD $40,210 $54,037 -- $40 less than similar vehicles
Luxury SUV Land Rover LR2 HSE $35,500 $48,518 -- $1,142 less than similar vehicles


[Sources: Automotive.com, Edmunds.com, IntelliChoice.com]

The lists above are approximations based on estimates and averages. As always, you should shop around and do your own research prior to purchasing a vehicle. Edmunds.com provides a useful calculator for estimating TCO.

For more information about total cost of ownership and other related topics, follow the links on the next page.