A recently published study by a Toyota Corolla owner shows some pretty interesting insight into total cost of ownership of the car over the years. The question the author tries to answer is whether buying a new car is better in the long run than buying a slightly used (1-2 years) car.
The calculations are based on some of today’s average US prices for car maintenance:
- Fuel/gas: $3.70 per gallon (~$1.00 per litre) at EPA’s “Combined MPG” value (31 miles per gallon down to 28 for older Corollas)
- Oil: $30 per 5,000 miles driven (~8,000 km)
- Tire rotation: $50 every 100,00 miles (~16,000 km)
- Filters: $120 every 30,000 miles (~48,000km)
- Brakes: $200 every 50,000 miles (~80,000km)
- New tires: $600 every 60,000 miles (~96,000km)
- Timing belt: $650 every 100,000 miles (~16,0000 km)
Some things might be missing, but the general outline is this. Another assumption that is made is that the car is driven for 15,000 miles per year (~24,000km), ignoring all insurance fees, registration fees, etc. And also no accidents.
The results for each consecutive year are outlined here:
With a purchase price of around $19,000 and 300,000 miles that can be driven, cost of maintenance throughout its lifetime will amount to an additional $11,000. Accounting for gas, maintenance and purchase price you’ll end up paying around 22 cents per mile driven (~14 cents per kilometer).
1-3 Years Used
With less miles left on a used car, a lower MPG (due to wear) will cost from $9,000 to $10,000 to maintain until the end of its life at the scrapyard. Owners would around 20-21 cents per mile.
3-5 Years Used
$7,000 to $9,000 to maintain and around 19 cents per mile if you’re lucky.
5-10 Years Used
Around $5000 to maintain but around 20 cents per mile.
The full datasheet can be seen here (credit to u/redoran):
And a graph offering some insight into how the cost changes over the years:
So the peculiar thing here is that the overall cost per mile does not change drastically over time, staying within 20 cents per mile (12.5 cents per kilometer).
Of course this doesn’t take into account insurance costs. But in the grand scheme of things buying a new car is not an inefficient decision compared to buying a used one. At best you could be saving 10% when buying used.
Another point to take into account is buying new is a larger investment compared to used, and you might end up having to take a loan, which means your new car costs more per mile than a used one that’s debt-free.
We’d take this analysis with a pinch of salt, though, since maintenance costs are not linear as assumed in the study. Older cars tend to break down more. Although, the parts become cheaper. So there are a lot of things to take into consideration here. Many variables unaccounted for. Perhaps there’s no perfect formula, especially when it comes to different models, different countries even.
In any case, flawed or not, this is a great example of calculating the total cost of ownership of your vehicle. It should be something you do before you buy a car and decide to sell your current one.
Have you done similar calculations before purchasing a car? Which car gives the best bang for your buck?