November '19

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128 THE SHOP NOVEMBER 2019 \\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\ \\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\ inance costs on new car purchases have jumped 24% in 2019, according to new AAA research, pushing the average annual cost of vehicle ownership to $9,282, or $773.50 a month. It's the highest cost associ- ated with new vehicle owner- ship since AAA began tracking expenses in 1950, and a reminder that the true costs of owning a vehicle extend far beyond maintenance and fuel, according to the organization. "Finance costs accounted for more than 40% of the total increase in average vehicle ownership costs," said John Nielsen, AAA's managing director for Automotive Engi- neering & Repair. "AAA found finance charges rose more sharply in the last 12 months than any major expense associ- ated with owning a vehicle." The spike in finance charges— which rose from $744 to $920, a nearly $200 increase—was fueled by rising federal interest rates and higher vehicle prices. It comes as 72-month car loans have become increasingly common—meaning car buyers are paying more, and longer, for vehicles that lose value the moment they're sold. Long-term loans offer lower monthly car payments, but they ultimately cost the con- sumer more. AAA found that, on average, every 12 months added to the life of a loan adds nearly $1,000 in total finance charges. "Smaller monthly payments may be tempting to potential buyers, but they can add big costs in the long run," Nielsen said. The new figures come from Your Driving Costs, which reviews nine categories of vehi- cles—consisting of 45 models—to deter- mine the average annual operating and ownership costs of each. AAA focuses on top-selling, mid-priced models and com- pares them across six expense categories: fuel prices; maintenance/repair/tire costs; insurance rates; license/registration/taxes; depreciation; and finance charges. Annual average costs increased in each category. Of all costs, depreciation, a measure of how quickly a car loses value, remained the single biggest cost of ownership, accounting for more than a third (36%) of the average annual cost. It slowed a bit this year, with vehicles included in the study losing an average of $3,334 a year, up $45 (1.4%) from last year. Other key findings of this year's Your Driving Costs include: • Average fuel costs rose to 11.6 cents- per-mile, 5% higher than last year. The per-mile increase was driven by gaso- line prices, which are up 15.6 cents-per- gallon over the timeframe covered by the study. Fuel costs vary widely by vehicle type, ranging from a low of 3.65 cents- per-mile for electric vehicles, to 15.67 cents-per-mile for pickups. • Average maintenance and repair costs climbed marginally to 8.94 cents-per- mile, up 8.9% over last year. The increase was fueled by the growing complexity of vehicle systems and an updated method- ology for calculating repair costs. • Electric vehicles had the lowest main- tenance and repair costs—6.6 cents- per-mile—while medium-sized SUVs had the highest at 9.6 cents-per-mile. • The cost of licenses, registration fees and taxes rose $14 to $753 per year, an increase of 1.9%. EDITOR'S NOTE: This article originally appeared on THE SHOP's website. Sign up for our free eNewsletter that brings aftermarket industry news to your inbox daily at True Cost of Annual Vehicle Ownership Rises F \\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\ ONE MORE THING... New AAA research shows the average annual cost of vehicle ownership is $9,282, or $773.50 a month.

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