Posted by John Goreham
A new poll reveals the average cost of maintaining and repairing your vehicle. Don’t worry, be happy.
A new poll conducted by Harris Poll on behalf of Ally Bank has determined that, on average, Americans spend about $397 per year on vehicle maintenance and repairs. The poll took a five-year view of the amount folks spend to make that determination. The poll also found that the amount spent was age-related and that younger vehicle owners spent more than older.
Millennials and those who fall into Generation Z (ages 18-34) paid an average of $466 per year on vehicle maintenance and repairs (M&R). By contrast, those polled over 55 years of age averaged less than a dollar a day, just $330 per year in such costs. One could conclude that younger vehicle owners drive more, though the poll did not examine the link between miles driven and M&R costs. Here are the average five-year costs for maintenance and repairs reported by owners in the poll by age group:
18-34 spent $2,334
35-44 spent $1,978
45-54 spent $2,135
55 and older spent $1,654
Mark Manzo, President of Insurance at Ally Financial, makes the case that these vehicle costs are a difficult burden for drivers. Manzo said, “Many Americans rely on their cars to get to work and losing access to your vehicle can be a major disruption and huge source of stress—particularly if you can’t cover the repair cost.” Manzo continued, saying “What’s more, many of these drivers aren’t aware of options, like vehicle service contacts, to make their repair costs more predictable.” In case you haven’t guessed yet, Manzo’s company sells vehicle service contracts.
But are M&R costs unexpected? Do they make up a large percentage of the costs of owning a vehicle? BestRide’s opinion is “no” on both counts. For instance, the cost of fuel for America’s top-selling vehicle, the Ford F-150, ranges from about $1800 to about $2300 per year depending upon trim, so about five times the cost of maintaining and repairing the average vehicle per year. The Toyota RAV4 Hybrid, America’s top-selling affordable green vehicle has an annual fuel cost of $1,000 per year, and the Nissan Leaf EV has a cost of $600 per year for electricity. Even the most frugal vehicles cost an owner much more for energy than for maintenance.
Then there is depreciation. A typical vehicle costing $30,000 will lose about 40% of its value over the first three years of ownership. So, in each of those years, the vehicle costs the owner $4,000, about ten times the owner’s maintenance and repair costs. Even over the full lifespan of a vehicle, say 15 years, the depreciation cost is easily five times the cost for maintenance and repairs.
To take the sting out of having to deal with repair costs, every manufacturer offers a new vehicle warranty. The minimum is typically a comprehensive warranty for three years or 36,000 miles, and a five-year 60,000-mile drivetrain warranty. However, longer warranties are very easy to find. Every hybrid vehicle has a longer drivetrain warranty, and in some states, it extends by law to 10-years and 150,000 miles. Hyundai and Kia both offer original owners warranties that run for 10 years and Volkswagen has a standard (no added cost) transferable new vehicle warranty that extends for six years or 72,000 miles. Eliminating unexpected repair costs is easy for those who shop wisely for a new vehicle.
There are also certified pre-owned vehicles from every major brand that come with warranties on used vehicles. The typical minimum is one year of “bumper to bumper” coverage, but most also extend longer for the drivetrain. You will pay a bit more for a CPO used vehicle, but along with that slightly higher cost, you get a fixed cost of ownership.
Maintenance costs are also not the same for all vehicles. Toyota offers two years of included maintenance on its vehicles. At the high end of the market, Jaguar includes five years. Tesla promises that its new Model 3 will have no meaningful maintenance costs aside from tires. Savvy shoppers will also consider proven low maintenance used vehicles like the Toyota Prius which has no pricey timing belt that needs to be changed.
For those who have difficulty budgeting for unexpected costs, extended warranties are available from every manufacturer and from private insurance companies. In some circumstances, these are worth considering, but it is worth stepping back and looking at the total cost of ownership of a vehicle before buying a service contract you may never need.
Image Notes:
Top of page image courtesy of Ally Bank.
Fuel cost chart courtesy of www.FuelEconomy.Gov
Other images by the author.
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