These are the cheapest new vehicles to own in each market category
This period is becoming difficult for buyers of new vehicles. Dealer stocks are tight, due to plant closures linked to COVID-19 last year, with the current shortage of microchips disrupting production again. According to Kelley Blue Book (KBB), transaction prices for new vehicles averaged $ 40,472 in March, which is an increase of $ 1,660, or 4.3% from the same period in 2020.
Even with automaker incentives and dealer discounts getting slimmer given the current state of supply and demand, savvy buyers can still save thousands of dollars over a typical tenure of ownership. five years by choosing a vehicle that is inherently less expensive to maintain.
This means keeping an accountant’s eye on key variables that include the rate of depreciation of a given vehicle – that is, how much it will have lost in value over half a decade – as well as the cost of the vehicle. fuel, insurance premiums, maintenance costs and warranty repair invoices.
Of particular note for those who might be purchasing a new luxury car or SUV in the next few months, the differences between certain cost factors, especially vehicle depreciation and insurance premiums, can be particularly stark. , simply because there is more money at stake.
Limiting one’s choices to models with the lowest long-term costs of ownership would usually involve a lot of research. Fortunately, the valuation experts at Kelley Blue Book have just awarded their annual 5-year cost of ownership awards which identify the cheapest rides to own in each of 22 distinct vehicle classes. We present each of the category winners below.
“Choosing a low-cost car can help buyers save significant amounts of money over time – often several hundred and sometimes even thousands of dollars – so it’s worth researching the cost of ownership details for any new one. car you’re considering, ”says Eric Ibara, director of residual values for KBB.
KBB says the cheapest vehicle overall to own for 2021 is the Hyundai Venue subcompact crossover SUV, which is expected to cost an owner $ 29,145 over five years.
Among individual brands, Toyota receives the award for having the lowest overall cost of ownership among mainstream brands for 2021; KBB cites premium brand residuals as the main contributor to low costs of brand ownership. Among luxury automakers, Toyota’s Lexus division gets the nod for lowest overall average costs of ownership, with several models leading to various cost of ownership categories.
What are the most important long-term ownership costs to consider? The most important factor is undoubtedly depreciation, or the extent to which a given model maintains its value over time, based on various economic factors and historical data. Choosing a vehicle that returns more value at the time of trade-in than the standard allows an owner to pocket more money by selling it outright, or having a larger down payment to make on a subsequent purchase .
As we’ve all learned, gasoline prices having risen by over $ 1.00 per gallon over the past year to reach a national average of $ 2.89 per gallon for regular unleaded (according to AAA), choose a car or truck that gets better fuel economy. that a comparable model can also achieve significant savings over time. According to the EPA’s fueleconomy.gov website, choosing a vehicle in a given class that gets an additional 10 miles per gallon over another will save an owner 15,000 combined city and highway miles per year $ 1,750 over one. period of five years. And if you live in a state that suffers from much higher-than-average fuel prices, like California averaging $ 4.01 per gallon, the stakes are even higher.
Insurance premiums are another long-term cost driver, and although they are largely based on driving record, age, gender, credit rating, address and kilometers driven by a motorist, some vehicles tend to offer inherently lower rates than others based on their history of complaints. and repair costs. Following this logic, it’s easy to see why family-minded SUVs tend to get the lowest rates, while high-performance sports cars and high-end luxury cars are rated as the lowest premiums. more expensive.
Here are the 22 new vehicles that KBB believes will offer the lowest cost of ownership over a five-year period:
- Compact car: Hyundai Elantra; $ 30,117
- Mid-size car: Volkswagen Passat; $ 36,368
- Full size car: Dodge Charger; $ 45,872
- Entry-level luxury car: Acura ILX; $ 39,069
- Luxury car: Volvo S90; $ 67,050
- Sports car: Mazda Mx-5 Miata; $ 42,330
- Hybrid / alternative energy car: Toyota Corolla Hybrid; $ 30,028
- Electric vehicle: Nissan Leaf; $ 37,680
- Sub-compact SUV: Hyundai Venue; $ 29,145
- Compact SUV: Subaru Forester; $ 36,446
- 2-row mid-size SUV: Subaru Outback; $ 40,614
- 3-row mid-size SUV: Subaru Ascent; $ 38,898
- Full-size SUV: Nissan Armada; $ 63,224
- Luxury subcompact SUV: Lexus UX; $ 44,621
- Luxury compact SUV: Lexus NX; $ 48,906
- Mid-size luxury 2-row SUV: Lexus RX; $ 60,931
- 3-row luxury mid-size SUV: Volvo XC90; $ 59,509
- Full-size luxury SUV: Infiniti QX80; $ 90,014
- Off-road SUV: Jeep Wrangler; $ 41,187
- Mid-size van: Ford Ranger; $ 40,532
- Full-size pickup truck: Ford F-150; $ 48,456
- Minivan: Chrysler Voyager; $ 41,954
You can read KBB’s full 5-year cost of ownership report here.