NEW YORK (WWTI) — AAA is urging new car buyers to be aware of all the expenses associated with ownership so that they can negotiate the best deal for their budget.
The 2021 AAA Your Driving Costs study reviewed nine categories of vehicles which consisted of 45 different models to determine the average annual operating and ownership costs of each. They compared the top-selling, mid-priced models across six expense categories including fuel, maintenance costs including repairs and tires, insurance, depreciation and finance charges, and expenses involving driver’s license, registration and taxes.
According to a press release from AAA, their study revealed the average annual cost of new vehicle ownership is $9,666, or $805.50 per month. The company says the biggest reason for the almost $10,000 annual expense is depreciation, a measure of how quickly a car loses value, which accounted for 40% of all ownership costs.
AAA’s director of automotive engineering and industry relations Greg Brannon said buyers should be looking at the big picture when buying a car.
“Consumers have to remember the expense of owning a car goes far beyond the monthly payment,” Brannon said. “Plus, we are seeing costs increase for a number of products recently, and cars are no exception. This trend will likely continue as new vehicles come equipped with the latest technology, which naturally drives up the sticker price.”
The study discovered that on average fuel costs 10.72 cents per mile and maintenance combined with repair expenses costs 9.55 cents per mile. The company said the average price of a new vehicle in 2021 is $32,903.
According to their press release AAA said with strains on inventory this year, it is critical for consumers to do as much research as possible before beginning the buying process. They said understanding all of the options available as well as individual needs can ease some of the anxiety associated with purchasing a car.
They suggest assessing budgets, trade-in value and down payment amount before considering any specific make or model. They also are urging consumers to consider whether financing or leasing will be the best option for them personally.
The company warns consumers about long terms loans, knowing that they can result in a period of time when the vehicle will hold less value than what is owed due to depreciation. They also suggest looking at both new and slightly used vehicles, and always test driving the exact model of the car they want to purchase.
They said the most important thing to remember is in most cases, there are three separate negotiations that occur when purchasing a car being the price of the new vehicle, trade-in value and finance rate. Consumer should take their time and negotiate them individually.