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A riddle for auto buyers: When is a $22,000 car cheaper than a $20,000 car? Answer: When you figure out how much the car will cost after you drive it off the dealer lot.

That hidden pricetag could cost more than the car itself. Few buyers think about what they will pay to insure, maintain or gas up the the car over five years of ownership. Auto Web site Edmunds.com factored in those costs and several others to calculate what it calls the true cost of owning a car.

"The biggest factor is depreciation -- how well the vehicle holds its value over time," says Bob Kurilko, marketing VP at Edmunds.com, based in Santa Monica, Calif.

Compare a $20,630 2004 Chevy Malibu and a $22,171 2004 Honda Accord - similar options, similar drivers - to see why the Honda is the bargain. The cost of maintaining both cars over five years, about $3,400, is a wash, as are fuel expenses, about $6,100. The real difference: depreciation. After five years the Mailbu will have lost 70 percent of its value; the Accord 50 percent. Edmunds says the true cost of owning the Malibu is $31,960, the Accord, $28,897, more than making up the $2,000 difference in sticker price.

"You can get the Malibu for fewer dollars . . . but the Honda beats the Malibu in so many different ways," Kurilko says.

The depreciation difference plagues the domestic car makers to such an extent that just two vehicles made by the Big 3 are the best values in Edmunds' 27 auto categories.

Just a few of those values:


• SUVs under $35,000: The Toyota Highlander costs about $27,000 to buy. Tack on the five-year ownership cost of about $35,000.


• Sedans under $35,000: The Acura TSX. Purchase price: $27,000. True cost to own: $35,000.


• Full-size pickups: Ford f-150 Heritage edition. The F-150 costs about $24,000 to buy. The true cost to own over five years is $39,000.

Here are three ways to lower the true cost of owning a new car:

• Fuel accounts for 10 to 20 percent of the cost of running your car. You can't control pump prices but you can select an engine that gets the most bang for your fuel dollars. Kurilko says the Volkswagen Passat's turbo engine provides marginally better performance than a V-6 but at a high cost in fuel mileage.


• Insurance premiums will cost as much as gasoline over five years. Premiums have risen an average 7 percent a year over the last three years. Get a quote on a vehicle before you buy it. You might be surprised.


• The real drag on your wallet is depreciation. As soon as you drive a new car off the lot, it loses 20 percent or more of its value. Edmunds found depreciation accounted for one-third to one-half of the true cost of owning your car. That's a major cost on the back end when you sell the car. Look for cars that will hold the most value over three to five years.

Calculate the true cost to own a vehcile in Arizona:
http://www.edmunds.com/apps/cto/CTOintroController

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The Arizona Republic's Brahm Resnik reports on business and consumer news from 5 to 7 a.m. every weekday on 12 News Today (KPNX-TV). Do you have a money question? Email: [email protected]
 

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Hey Ray,

Thanks for the interesting article and for "the true cost to own a vehicle in Arizona" although I think I already know that one...

Too much :rolleyes:
 

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depreciation is the worst enemy...fuel depend on your driving style, insurance depend on how many tickets you got and how manycars u own. but the pain of buying new car.. depreciation.. the 1st 5 years its hell.. after that.. then u really know how well built your car and reallysee whether it is worth it to buy that car in the 1st place
 

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BB1_VTEC said:
depreciation is the worst enemy...fuel depend on your driving style, insurance depend on how many tickets you got and how manycars u own. but the pain of buying new car.. depreciation.. the 1st 5 years its hell.. after that.. then u really know how well built your car and reallysee whether it is worth it to buy that car in the 1st place
Well, welcome back, neighbor! (Flushing boy here. Hold the wisecracks please, thank you.) :D
I see you were here a while ago -- great that you took another look.

Neat sites of yours, btw.
 
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