Top 10 least expensive vehicles to own
The cost of owning vehicle goes beyond its purchase price
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Insurance companies consider the Nissan Versa a safe bet, so a safe bet for those not looking to shell out a lot over the long term.
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By Jeff Zygmont  The cost of owning a vehicle goes beyond the purchase price. Expenses like insurance and maintenance can add up. To attain absolute rock bottom ownership costs — which still tally more than $30,000 over five years, even for a $10,000 car — a vehicle must be spartan. It must be small and lightweight to maximize fuel economy. And it should skimp on features, so that maintenance and repair costs stay low. But most of all, it must start life with a sticker price well below even the most affordable luxury cars. A low purchase price holds down insurance premiums, taxes and fees, financing costs, and, especially, depreciation. That’s why the priciest car on our list is the tenth ranked Honda Civic DX, which starts at just $15,010. Our ranking is based on data from Vincentric, a Bloomfield Hills, Mich.-based research company specializing in automotive cost analysis. Vincentric calculates five-year ownership expenses by estimating cumulative losses from depreciation, interest and opportunity costs, maintenance and repairs, taxes and fees, fuel, and insurance. See the end of this story for an explanation of each expense. The vehicles on our list are relatively inexpensive, but their value is rising in the current economy, especially as gasoline prices climb. Autodata, which tracks sales for the auto industry, reports that overall vehicle sales dropped 8 percent in the first quarter of 2008. But the small-car segment actually grew by 3 percent during that down period. If small-car demand continues to grow, ownership costs could decrease even more: Higher prices for economical used cars will keep new-vehicle depreciation in check. “It's always a matter of supply and demand,” says David Wurster, Vincentric's president. “As people want more of these vehicles, they vote up their price.” A good resale value is critical to total ownership cost because depreciation is the greatest single part of the total. Cars with lower depreciation rates (higher resale values) will require lower total ownership expenses than peers in the same price group or model segment. Six models on our list incur higher fuel expenses, but only because depreciation takes fewer dollars from budget-priced cars to begin with. | More from ForbesAutos.com |
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“Depreciation is the one cost that most people forget about,” says John Paul, manager of public affairs for AAA of Southern New England. “They look at all the other costs, but they forget how much a car is going to depreciate, even over the first year.” To gauge deprecation rates when shopping for a new car, Paul suggests researching used-car prices for models on your list. Comparing used prices to the prices of new models shows approximately how much each vehicle depreciates. “Sometimes the cheapest car isn't always the best deal, especially when it comes time to trade it in,” Paul says. A company’s reputation can also indicate how well a vehicle holds its value. “The vehicles with very good reputations for quality are going to continue to do best,” Vincentric’s Wurster says. “That's why you see Toyotas and Hondas doing well year after year. They have good reputations.” | Click for related content |
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Indeed, the two Hondas on our list depreciate much less than most other models in the top 10. The Honda Fit makes the No. 2 spot on the strength of its low, 58 percent depreciation rate over five years. With a 62 percent depreciation rate, the Honda Civic DX sneaks onto the list at No. 10, even though it has a high starting price compared to other models in the ranking. That's not accidental. Recognizing the allure of low depreciation, Honda pursues a strategy aimed at maintaining high resale rates. CONTINUED: Avoiding too much supply
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