Tuesday, November 13, 2007

True Cost to Own

While car shopping over two years ago, I came to be a passing acquaintance of Edmunds.com. I cann't pretend I know all of Edmunds features, but one that I found (and continue to find) uber useful is their True Cost to Own estimator. In their own words, TCO "helps you estimate the total five-year cost of buying and owning a vehicle - including some items you may not have taken into consideration."

Of course, as with all generalizations, the TCO calculator must make certain assumptions, such as:

  • average annual mileage is 15,000 miles;
  • the buyer is financing the vehicle using traditional financing, not lease financing;
  • the buyer is "in the Gold credit tier";
  • the buyer is putting a 10% down payment on vehicle; and
  • the retail contract term is 60 months.
Overall, the TCO calculator helps to compare the cost of a car over the span of five years by comparing your estimated costs in seven specific categories:
  1. depreciation
  2. insurance
  3. financing
  4. taxes & fees
  5. fuel
  6. maintenance
  7. repairs
For a more detailed breakdown of associated costs, see here.

And while it doesn't claim omniscience, the TCO calculator does at least serve as a reminder of the costs of new car ownership. As Edmunds.com says, "A benefit of using this tool is that you can...make a more informed choice."

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