AAA Says Electric Vehicles Have A Lower Than Average Ownership Cost
According to the latest AAA report – 2017 Your Driving Costs, all-electric cars have a lower-than-average driving cost at ~$8,439 per year.
Average for the industry (new cars) is $8,469 annually, or $706 each month. Which means, at least according to the AAA, EVs have reached parity with the broader automotive market.
We would like to see BEVs on the top of the list (AAA compared the BMW i3, Chevrolet Bolt EV, Nissan LEAF, Kia Soul EV and Fiat 500e), however it seems all-electric cars are not yet close…and here’s why.
The energy costs (under four cents per mile) and maintenance costs ($982 per year) are the lowest in the industry by far, but the result is close to average because of depreciation of $5,704 in value every year on average for BEVs.
As always we have issue with this “5,704” in average depreciation per year, because as always, it seems that the true cost of the EV to the owner is not accounted for. ie) recognizing the stating MSRP of a EV in America needs to be lowered anywhere from $7,500 to $12,500 depending on the point of purchase and governmental subsidies eligible.
As most all all-electric owner in the US knows today, any “affordable” EV with a starting MSRP under $30,000, has only fractional real-world ownership costs compared to the average petrol vehicle. However, the trade-off is that the abilities of that inexpensive EV is still limited compared to its petrol cousins (range and recharging time).
“Without a gasoline engine to maintain, electric vehicles have the lowest annual maintenance and repair costs, at $982 per year. By relying on electricity instead of gasoline, fuel costs are also significantly lower than average, at under four cents per mile. Depreciation, however, is currently extremely high for these vehicles, losing an average of nearly $6,000 in value every year.”
Here are the highlights of the report:
AAA Reveals True Cost of Vehicle Ownership
Average new vehicle will cost nearly $8,500 annually to own and operate
ORLANDO, Fla. (August 23, 2017) – Owning and operating a new vehicle in 2017 will cost a driver an average of $8,469 annually, or $706 each month, according to a new study from AAA. The annual evaluation of driving costs reveals that small sedans are the least expensive vehicles to drive at $6,354 annually, however small SUVs ($7,606), hybrids ($7,687) and electric vehicles ($8,439) all offer lower-than-average driving costs to U.S. drivers. Conversely, of the nine categories included in the evaluation, pickup trucks are the most expensive vehicles to drive at $10,054 annually.
“Determining the cost of a new vehicle car is more than calculating a monthly payment,” cautioned John Nielsen, AAA’s managing director of Automotive Engineering and Repair. “While sales price is certainly a factor, depreciation, maintenance, repair and fuel costs should be equally important considerations for anyone in the market for a new vehicle.”
In addition to analyzing the ownership costs for sedans, SUVs and minivans, AAA’s Your Driving Costs study added four new vehicle segments in 2017 – small SUVs, pickup trucks, hybrids and electric vehicles.
Vehicle Type Annual Cost* Vehicle Type Annual Cost* Small Sedan $6,354 Minivan $9,146 Small SUV $7,606 Large Sedan $9,399 Hybrid $7,687 Medium SUV $9,451 Medium Sedan $8,171 Pickup Truck $10,054 Electric Vehicle $8,439 Average $8,469
*Based on 15,000 miles driven annually
To estimate the overall cost to own and operate a new vehicle, AAA evaluated 45 2017 model-year vehicles across nine categories and focused on mid-range, top-selling vehicles. AAA’s annual driving cost is based on a sales-weighted average of the individual costs for all of the vehicle types. Key findings include:
Depreciation — the declining value of a vehicle over time — is the biggest, and most often overlooked, expense associated with purchasing a new car. New vehicles lose an average of $15,000 in value during the first five years of ownership. In 2017, small sedans ($2,114) and small SUVs ($2,840) have the lowest annual depreciation costs, while minivans ($3,839) and electric vehicles ($5,704) are at the high end of the scale.
Maintenance and repair
To calculate annual maintenance and repair costs, AAA examined factory-recommended maintenance, replacement tires, extended warranty costs and services associated with typical wear-and-tear. New vehicles, on average, will cost a driver $1,186 per year to maintain and repair.
The inevitable costs associated with maintenance and repair should be an important consideration for car shoppers, as a recent AAA survey found that one-third of U.S. drivers could not afford an unexpected repair bill. AAA Approved Auto Repair facilities offer free vehicle inspections, AAA member discounts and a 24-month/24,000-mile warranty for AAA members. Visit AAA.com/AutoRepair to find a nearby facility.
Fuel costs vary significantly by vehicle type, ranging from 3.68 cents per mile (electric vehicles) to 13.88 cents per mile (pickup trucks). New vehicle owners, on average, will spend just over 10 cents per mile – about $1,500 annually — to fuel their vehicles.
For gasoline-powered vehicles, AAA recommends selecting a TOP TIER gasoline, as its independent research found it to keep engines 19 times cleaner, improving vehicle performance and fuel economy. AAA cautions drivers that using premium-grade gasoline in a vehicle that does not specifically require it is an unnecessary expense.
New to the Your Driving Costs study in 2017, AAA found that electric vehicles have lower-than-average driving costs at $8,439 per year. Without a gasoline engine to maintain, electric vehicles have the lowest annual maintenance and repair costs, at $982 per year. By relying on electricity instead of gasoline, fuel costs are also significantly lower than average, at under four cents per mile. Depreciation, however, is currently extremely high for these vehicles, losing an average of nearly $6,000 in value every year.
A recent AAA survey revealed that 1-in-6 Americans are likely to choose an electric vehicle, the majority motivated by their lower long-term ownership costs.
“Although electric vehicles can have higher up-front costs, lower fuel and maintenance costs make them a surprisingly affordable choice in the long run,” said Nielsen. “For even lower costs, car shoppers can avoid high depreciation costs by selecting a used electric vehicle.”