KBB Cost Of Ownership Awards – One Measure Of Used Car Value

by Don Elliott on March 7, 2012

Over time, what makes a vehicle a good used car value? Kelley Blue Book, the well-known resource for new and used car prices, introduced the Kelley Blue Book 2012 Cost of Ownership Awards at the 2012 Chicago Auto Show. The Kelley Blue Book folks took a look at the entire fleet of 2012 new cars, trucks, SUVs and minivans to identify the best value over five years of ownership.

To quantify the cost of ownership, Kelley Blue Book analyzed eight components of ownership to identify the best in class from 21 different market segments. Components with factors by percentage include:

  • Fair Purchase Price (FPP)
  • Projected Depreciation 44%
  • Financing Costs 6%
  • Insurance Costs 9%
  • State Fees 6%
  • Cost of Fuel 26%
  • Scheduled Maintenance 5%
  • Repairs 4%

For each car model, the factors will vary. For example, the Audi A5 had the lowest cost of ownership in the luxury car class, winning by nearly $5,000 over some other very impressive competition. The A5 had the lowest depreciation and the lowest cost to insure as deciding factors driving the lowest cost to own. The A5, A4, and A3 teamed up to provide Audi with the “Best Luxury Brand” crown.

Depreciation is the single largest factor influencing the cost of ownership accounting for an average of 44% of the cost. An average vehicle depreciates at about 65% over a five-year period. New models, rebates, and supply factors can influence the used car value over time. The market segment can influence the rate of depreciation. The Mazda Miata and the Mazda 6 have roughly the same purchase price. However, the cost of ownership for the Miata is roughly $7,500 less than the Mazda 6 over a five-year period.

Kia took the award for “Best Brand.” Led by the Optima, Sorento, and Soul nameplates, Kia’s inspired fuel economy and impressive resale values contributed to the top place rating.

Not all categories were clearly defined. The 2012 Nissan Versa had a five-year cost of ownership of $29,252, edging out the 2012 Toyota Yaris by just $38. Lowest purchase price won the class for Versa.

New models will hold their value better than more dated competitors. In the minivan class, the 2012 Mazda 5 easily beat out the venerable Dodge Grand Caravan with the lowest purchase price and better depreciation. Add to that a $2,200 fuel savings over the five-year period, and we have a surprise winner.

Consider the cost of ownership when shopping for your next car. Not all of the factors are readily available, but the actual purchase price, depreciation, and fuel economy will provide a quick summary of how the future will impact your used car value over time.

 

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