Cheap Dates: The 10 Least Expensive Cars to Own

[ALS]

We look at sticker price, insurance costs, and fuel economy to determine the cheapest cars to own

Jared Gall - YAHOO - May 23, 2010

When it’s time to buy a new car and desperation comes calling, all other priorities peel away, leaving price alone to govern the decision. But simply buying the cheapest car isn’t necessarily the cheapest route. Cars—even the affordable ones—are expensive to own and operate. So we went in search of the answer to an important question: What is the cheapest car to buy and own? Fuel is an obvious consideration, but insurance can’t be ignored, either.



To normalize purchase-price variations based on the terms of a loan, we’re using MSRP for purchase price and settled on a three-year ownership window. On top of MSRP, we rolled in the cost of insurance over three years for a 28-year-old male, single, living in the same area as our Ann Arbor offices. Fortunately for him, he has no tickets. To that sum, we added the cost of fueling each car during that time based on 12,000 miles traveled annually and using the EPA’s combined fuel-economy rating and the nationwide average price of regular gas over the past year—which, at $2.57 a gallon, sounds mighty appealing. Although the EPA’s figure doesn’t perfectly reflect the fuel economy people will see in day-to-day use, it does provide an accurate prediction of how vehicles will fare relative to one another.



DISCLAIMER: The figures below are accurate as of the publishing date. However, MSRP varies almost daily. Fuel mileage will vary depending on driving conditions, driving style, and other factors. Insurance rates vary town to town, driver to driver, and minute to minute. Cars are listed in descending order of ownership cost. No, we will not buy you one.



Hyundai Elantra
Base MSRP: $14,865

EPA Combined Mileage: 29 mpg

Three-Year Fuel Cost: $3194

Three-Year Insurance Cost: $3527

Total Three-Year Cost: $21,586



A manual transmission is the short-changed buyer’s best friend, as manuals are typically $1000 or so cheaper than automatics and, except in the case of today’s most bleeding-edge transmissions, are more fuel efficient to boot. This Hyundai is a perfect example, as the only manual transmission available in the entire 2010 Elantra sedan lineup is in the base Blue model tuned for—you guessed it—maximum fuel efficiency. Lower-rolling-resistance tires, a more efficient alternator, and electric power steering—instead of hydraulic—also aid fuel economy. We here at C/D like manuals because they increase driver involvement, too, an area in which the Elantra sedan could use some improvement, so there’s a bonus.
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[phoebeisis]

Interesting, and correct I guess for actual out of pocket expense.

Of course resale is ignored, so less expensive cars lead this list.

Other more expensive cars-the Fit maybe,and maybe the Prius depending on how far you want to extend ownership, could make the list.

True we would then have to argue about resale, and speculate about future resale.

Good list-cheap to buy cas are cheap to own if they get good mpg. I might quibble about the Smart as an only car for a USA type family. It really needs its TDI to make it a winner.

Charlie

[bnther]

I always have issues with these kinds of articles. As mentioned above, resale is not included nor are the mileage figures ever accurate. I own a Yaris sedan and my mileage is significantly higher than 32mpg. I have a hard time believing that the new Kia Soul is going to be cheaper on the budget than my Toyota (I'm not knocking the little KIA, I'm just waiting for the Soulster to come out so that I can get one )

[ILAveo]

Originally Posted by phoebeisis

Interesting, and correct I guess for actual out of pocket expense.

Of course resale is ignored, so less expensive cars lead this list.

Other more expensive cars-the Fit maybe,and maybe the Prius depending on how far you want to extend ownership, could make the list.

............

Good list-cheap to buy cas are cheap to own if they get good mpg.

Charlie

The impact is that they under-emphasize operating costs in favor of sticker price.

If they're going to ignore resale they should use a long enough time horizon that differences in resale values will probably be negligible compared to total ownership costs. Though you would also expect maintenance costs to be an important factor in 10 year cost of ownership.

[phoebeisis]

Right- if you extend ownership out to about 120,000 miles- 10 years-then really FE cars like the Prius, HCH2, Insight etc would probably make the list.

My 2nd car-98 Suburban- has 213,000 miles on it-just the last 17,000 are mine.Lots a vehicles go well over 150,000 miles now, and many owners own them for 150,000 miles.

Three years is just a lease-roughly 35,000 miles-still in warranty.
Charlie

[Yaris Hilton]

Those fools are still ragging on the center instrument pod of the Yaris. You don't have to divert your eyes as much to look at it as the rear view mirror, and have a better view ahead.

[ItsNotAboutTheMoney]

Originally Posted by phoebeisis

Right- if you extend ownership out to about 120,000 miles- 10 years-then really FE cars like the Prius, HCH2, Insight etc would probably make the list.

My 2nd car-98 Suburban- has 213,000 miles on it-just the last 17,000 are mine.Lots a vehicles go well over 150,000 miles now, and many owners own them for 150,000 miles.

Three years is just a lease-roughly 35,000 miles-still in warranty.
Charlie

Well, it's a stupid article because if you're that focused on money it doesn't make sense to buy new anyway.

Let's see:

Car A: 22.8k, 50mpg
Car B: 14,865, 29mpg
Price Difference: 7935
Let's try with 3/g and 4/g.
Gallons difference: 120k/50 - 120k/29 = 120k*21/(50*29) ~ 1738

3/g: 5214
4/g: 6952

Given the "opportunity loss" of the extra money spent on the car you'd have to make it up with the residual value.

If you're a higher-mileage driver (we do 20k per year):

200k*21/(50*29) ~ 2897
3/g: 8691
4/g: 11588

But then, if you're a high mileage driver you probably have more highway miles, so the Prius doesn't benefit you as much. Let's say 75/25 highway/city.

Prius: 51/49: 49.5
Elantra: 26/35: 32.5

3/g: 6,199.40, -1,735.60 with price
4/g: 8,265.86, 330.86 with price

There are maintenance costs to take into account, of course, but it would appear that residual value would be a key factor. But after 10 years and lots of miles, who knows how much it will be worth. (Hopefully lots since I have one )

I got the Prius expecting that it would cost me more overall than a regular car, but knowing that the reduced gas consumption would pay a significant chunk of the difference back. Reducing gas consumption is important enough to me that I was willing to pay the difference that I could afford.

I still think it'll cost more overall. I worked quite hard to get 60mpg last tank in the Prius and worked a lot less to get 44mpg in our 2008 Civic AT.

[WriConsult]

Originally Posted by ItsNotAboutTheMoney

Well, it's a stupid article because if you're that focused on money it doesn't make sense to buy new anyway.

Ding ding ding! We have a winner!!

[bomber991]

Originally Posted by ItsNotAboutTheMoney

But after 10 years and lots of miles, who knows how much it will be worth. (Hopefully lots since I have one )

Lets put that to the test. It seems like most cars are next to worthless once they hit that 10 year old mark. Time to check the local craigslist.

Wow, 2000 Honda Civics go for nearly double what a 2000 Kia Sephia does! Unfortunately it seems like it's still less than a $2k difference in price.

Now with the Prius, who knows what that will be worth. It seems like the first gens are pretty cheap, but that's cause they're both old and ugly. The 2nd gen is where the Prius really kicked off. Just with a quick search there's a guy selling a 2004 Prius that's a 2nd gen with 180k miles, asking $6k, but from these pictures the car looks brand new:
http://sanantonio.craigslist.org/cto/1755661499.html

[ALS]

How did a $22.5 Prius come into this discussion? They are talking about car costing from
$11K and $15K.

Used is usually the best way to go over the long run if you want to save some serious cash.

I own a 2010 Prius because of the clunker program. I was looking at at 2007 -2008
HCHII and Prius for a replacement vehicle. I ended up buying my Prius III out the door for $20,500. At the time 2007's with 30,000 miles were selling for $19,995 around me. With sales tax and registration transfer it would have cost me close to $21,500, a $1,000 more.

So which car was the best value over the long haul. A two year old used second generation Prius with 30K miles or a new third generation with 20 miles on the odometer?

The other side of the argument is financing differences between a new and used car.
A new car with good credit can be had for 0-3% interest rates. Used cars usually come with 6.0 to 7.0 interest rates to start.

If your paying cash for the car in most cases a two or three year old car is the best value for the money. If the vehicle is being financed you need to add in the additional interest charges to the ownership costs.

Not everyone can afford a $400 car payment and these low priced automobiles give them an opportunity to get a new car with a payment under $200 a month.