xcel
08-20-2006, 04:34 AM
Factor in fuel and insurance bills. (http://www.belleville.com/mld/belleville/business/15249769.htm?source=rss&channel=belleville_business)
Pameal Yip - Dallas Morning News - August 20, 2006
http://www.cleanmpg.com/photos/data/501/2003_Toyota_Echo.jpg
2003 Toyota Echo is a good used car value but would you own it vs. anything else?
DALLAS - These days, buying a vehicle has a lot more to it than just the monthly payment. Because of higher insurance, fuel and repair costs, buyers should take a holistic approach to purchasing an automobile.
The good news is, with so many information sources available, it's easier than it has ever been for buyers.
Online tools also can help you determine the total cost of owning and operating a vehicle.
Edmunds.com and Kelley Blue Book, two independent auto information providers, offer total-cost-of-ownership calculators on their Web sites.
"A lot of people are very good at ignoring this kind of thing because it's an emotional purchase. So very often they're in the position of wanting to justify something that really is not within their means," said Philip Reed, consumer advice editor at Edmunds.com. "If they know this kind of thing, they can avert a bad financial decision."
Depreciation is the biggest single factor in ownership costs, Reed said.
You may find that when comparing two vehicles, the one with the lower purchase price ends up costing you much more in the long run.
So let's consider some of the choices car buyers have to make that affect the total cost of ownership.
The most basic question is whether to buy new or used.
For some people, it's a purely practical, financial decision. For others, it's personal and emotional.
"A lot of people don't want to buy a used car almost for ego reasons more than anything else," said Jack Nerad, executive editorial director and market analyst at Kelley Blue Book.
That's one reason new cars lose value so much in their first year - in some cases, 30 percent of their original price. New cars also depreciate because the transaction changes from a dealer-to-consumer sale, which includes things like license, registration and destination charges that aren't part of a trade-in or private-party sale price.
"If you're trying to maximize your money, the used car is definitely the way to go," Reed said.
The downside of buying used is that there are more unknowns. "A new car is based on known factors like condition level, the sticker price," Reed said. "With a used car, the condition is never really fully known."
One question many car buyers are asking is whether now's the time to buy a hybrid.
Soaring gas prices and tax breaks have helped make hybrid vehicles popular. A hybrid vehicle operates with a gasoline engine augmented by an electric motor that charges itself when the driver slows down or brakes.
"A hybrid would be perfect for somebody who stops and starts a lot," Reed said.
But it still may not make perfect financial sense.
"You'll pay a premium for the technology," Reed said. "You're buying about a 20 percent premium over a gasoline-priced engine."
Better gas mileage and tax incentives make up some of that premium. But the online calculators show that hybrids still wind up costing consumers more over the long run.
Pameal Yip - Dallas Morning News - August 20, 2006
http://www.cleanmpg.com/photos/data/501/2003_Toyota_Echo.jpg
2003 Toyota Echo is a good used car value but would you own it vs. anything else?
DALLAS - These days, buying a vehicle has a lot more to it than just the monthly payment. Because of higher insurance, fuel and repair costs, buyers should take a holistic approach to purchasing an automobile.
The good news is, with so many information sources available, it's easier than it has ever been for buyers.
Online tools also can help you determine the total cost of owning and operating a vehicle.
Edmunds.com and Kelley Blue Book, two independent auto information providers, offer total-cost-of-ownership calculators on their Web sites.
"A lot of people are very good at ignoring this kind of thing because it's an emotional purchase. So very often they're in the position of wanting to justify something that really is not within their means," said Philip Reed, consumer advice editor at Edmunds.com. "If they know this kind of thing, they can avert a bad financial decision."
Depreciation is the biggest single factor in ownership costs, Reed said.
You may find that when comparing two vehicles, the one with the lower purchase price ends up costing you much more in the long run.
So let's consider some of the choices car buyers have to make that affect the total cost of ownership.
The most basic question is whether to buy new or used.
For some people, it's a purely practical, financial decision. For others, it's personal and emotional.
"A lot of people don't want to buy a used car almost for ego reasons more than anything else," said Jack Nerad, executive editorial director and market analyst at Kelley Blue Book.
That's one reason new cars lose value so much in their first year - in some cases, 30 percent of their original price. New cars also depreciate because the transaction changes from a dealer-to-consumer sale, which includes things like license, registration and destination charges that aren't part of a trade-in or private-party sale price.
"If you're trying to maximize your money, the used car is definitely the way to go," Reed said.
The downside of buying used is that there are more unknowns. "A new car is based on known factors like condition level, the sticker price," Reed said. "With a used car, the condition is never really fully known."
One question many car buyers are asking is whether now's the time to buy a hybrid.
Soaring gas prices and tax breaks have helped make hybrid vehicles popular. A hybrid vehicle operates with a gasoline engine augmented by an electric motor that charges itself when the driver slows down or brakes.
"A hybrid would be perfect for somebody who stops and starts a lot," Reed said.
But it still may not make perfect financial sense.
"You'll pay a premium for the technology," Reed said. "You're buying about a 20 percent premium over a gasoline-priced engine."
Better gas mileage and tax incentives make up some of that premium. But the online calculators show that hybrids still wind up costing consumers more over the long run.