AAA: Fuel Costs Accelerate Depreciation for Some Segments
ORLANDO, Fla. — As the price of gas rises at the pump, in addition to driving up the cost of ownership for operating vehicles, it has also apparently had a negative impact on the resale values and depreciation of certain models, according to the AAA Your Driving Costs Study released Thursday.
Apparently, gas prices have jumped by double digits since the last time the study was conducted. This is leading to more fuel-efficient rides becoming increasingly attractive. The end result? Small sedans have managed to keep depreciation costs lower than other vehicle segments, explained John Nielsen, director of AAA Auto Repair and Buying.
"Rising fuel prices are a key factor in this year's Your Driving Costs study. Paying more at the pump is not only increasing the operational costs of vehicles, but it's also affecting depreciation values," Nielsen explained.
"With the growing appeal of more fuel-efficient vehicles, small sedans are experiencing less depreciation and holding their value longer, while we're seeing notable rises in depreciation costs with categories of less fuel-efficient vehicles," he continued.
In fact, of the five segments included in the study, the only class not to see an increase in depreciation costs was the small sedan segment.
Specifically, per year depreciation costs for small sedans ($2,384) were down 1.9 percent year-over-year.
Larger segments tell a different story, with SUVs tending to depreciate at approximately $5,003 annually, a 10.7-percent upswing from a year ago, and large sedans showing an average depreciation of $4,828 per year, a 6.1-percent rise. Depreciation for minivans ($3,995) was up 4.6 percent.
Continuing on, AAA indicated that medium sedans had depreciation costs of $3,451 per year, relatively flat compared with $3,401 in last year's study.
All together, AAA found that it costs, on average, $8,487 per year — which translates to $0.566 a mile — to own and operate a sedan, a 4.8-percent increase from 2009.
The study considered ownership costs (insurance, license and registration fees, taxes, depreciation and finance charges) and operational costs, which included fuel, maintenance and tires.
"Increases in the costs of fuel, tires and insurance were the primary factors causing a rise in all categories of vehicles," officials noted.
For example, as noted in the AAA Fuel Gauge Report, regular unleaded gas averaged $2.603 per gallon in the U.S. at the time of the study, a 12.7-percent upswing from the year-ago period.
Meanwhile, there was a 5.7-percent increase in the average annual cost to insure a sedan and an 8.7-percent spike in tire prices.
Moving on, AAA explained how it calculated the cost of driving a sedan each year. Basically, it determined each sedan segment's driving costs by taking the average costs of the five best-selling vehicles in the respective categories.
Specifically, the Chevrolet Cobalt, Ford Focus, Honda Civic, Nissan Sentra and Toyota Corolla were considered for the small sedan segment, while the medium sedan segment included the Chevrolet Impala, Ford Fusion, Honda Accord, Nissan Altima and Toyota Camry.
The large sedan class was composed of the Buick Lucerne, Chrysler 300, Ford Taurus, Nissan Maxima and Toyota Avalon.
AAA also offered SUV and minivan information in the report, although these segments were not included in the composite average.
The SUV models considered were the Chevrolet TrailBlazer, Ford Explorer, Jeep Grand Cherokee, Nissan Pathfinder and Toyota 4Runner, while the minivan class included the Nissan Quest, Dodge Grand Caravan, Kia Sedona, Honda Odyssey and Toyota Sienna.
Though all five segments (the three sedan classes, SUVs and minivans) displayed an increase in costs, showing the slightest upswing was the small sedan class, whose costs of ownership were up 2.9 percent.
The segment's increase was modest mainly because these vehicles became more desirable during the gas price increase, officials indicated.
"It resulted in the small sedan category being the only one where depreciation costs were lower than last year, falling 1.9 percent," officials explained.
Breaking it down by segment, AAA listed the per-mile and per-year costs of driving each of the five segments, as follows:
Per mile: $0.433
Per year: $6,496
Per mile: $0.562
Per year: $8,436
Per mile: $0.702
Per year: $10,530
Per mile: $0.566
Per year: $8,487
Per mile: $0.739
Per year: $11,085
Per mile: $0.62
Per year: $9,301
Officials noted that all of the data in the study is based on 15,000 miles of driving each year.