This represents a 28 percent increase since 2003, according to the American Institute for Economic Research (AEIR), a nonprofit research and educational organization.
According to AIER president Charles Murray, the more than 25 percent increase in costs since 2003 is being driven by four factors--depreciation, insurance, taxes, and, not surprisingly, oil and gas.
"Taxes on motor vehicles have doubled since 2003," said Murray, whose staff annually produces the book length review of automobile expenses, What Your Car Really Costs. "But the real driving factor behind the overall increase is the rise in gas and oil costs, which soared from $53,250 in 2003 to $105,075 in late 2007."
This translates to a current cost per mile of $0.40 to $0.80 depending on the size of the car and the number of miles it's driven. Murray pointed out that most people, especially young people whose first major purchase may well be an automobile, probably only have a vague notion about the total expense of owning and operating personal vehicles.
"When buying a motor vehicle, people rarely think of the possible financial repercussions," he said. Yet, "the amount spent could negatively effect educational opportunities and housing quality and could lead to reduced retirement incom, or worse, the inability to acquire needed health care and dignified living conditions during one's later years."
"This may seem overly dramatic," he added. "But when you consider that the average consumer spends 18 percent of his or her income on transportation and that the only other thing Americans spend more of their disposable income on is shelter, you realize it's the truth."
In addition to oil and gas costs, taxes, depreciation and insurance, and the costs of the vehicle purchase or lease, lifetime driving costs also will vary depending on the amounts spent on maintenance and repairs, license and registration fees, and other sometimes hidden costs.
AEIR, a nonpolitical, independent research and educational organization founded in 1933 on the campus of Massachusetts Institute for Technology (MIT), first began tracking car costs in 1985 and updates its analysis for publication each fall. The recent edition of What Your Car Really Costs factors in recent changes to the personal vehicle market brought about by rising oil prices and the introduction of hybrids and other vehicles with higher than average gas mileage. It includes calculators to help car buyers determine which choice really would save them money.
AIER's core advice to automobile owners and potential owners: Monitor your costs.
"If you look closely at your expected income and your current and anticipated expenses, then you will be better able to judge at a given time ‘how much car' fits within your family's financial plan. If your auto-related expenditures appear much larger in relation to your income than the national average, then you may be mismanaging your financial affairs-no matter how good the bargain you struck on the purchase price of your car," Murray warned.
Offering both consumer analysis and advice, AIER's What Your Car Really Costs can help auto owners and prospective buyers:
- Put car costs in perspective. The book compares cost differences and explains how to understand the comparative information contained in Consumer Reports and elsewhere.
- Rank the "resale value" of their car, van, SUV or light truck based on 2003 to 2007 model data.
- Determine if it's better to buy a vehicle or to lease it.
- Choose between sales promotions such as rebates and lower interest rates.
- Keep track of motor vehicle expenditures by using the various charts and worksheets provided in the book.
What Your Car Really Costs is available from AIER online at http://www.aier.org or by calling (413) 528-1216. Individual copies cost $12.
