What Is 5-year Cost of Ownership?

We help you understand what a car will cost beyond its purchase price when you consider out-of-pocket expenses like fuel and insurance, plus the car's loss in value over time (depreciation).

Out of pocket expenses

Repairs - based on a $0 deductible extended warranty

4%Average for all vehicles

Repairs

Maintenance - what it takes to keep the car running well

5%Average for all vehicles

Maintenance

State Fees - items like tax, license and registration

6%Average for all vehicles

State Fees

Insurance - includes liability, collision and personal injury

9%Average for all vehicles

Insurance

Financing - based on a 5-year loan term at 4.99%

6%Average for all vehicles

Financing

Fuel - based on 15,000 miles driven per year

26%Average for all vehicles

Fuel

Loss in value

Depreciation - how well the vehicle holds its value over time. Particularly important if you keep the car for less than 5 years.

Depreciation

Purchase
Price

−

Value After
5 Years

44%

Average for all vehicles

Depreciation

The gap between what you paid and what it's worth in 5 years.

5-year Cost of Ownership

• Depreciation - Derived from Kelley Blue Book’s residual values and updated every 60 days, depreciation represents the decrease in the vehicle’s value based on the national Fair Purchase Price (or MSRP if the Fair Purchase Price is unavailable), economic factors and historical data.
• Repairs - Repairs are based on the retail price of a zero-deductible extended-warranty service contract that covers the vehicle for its initial five-year term of ownership.
• Maintenance - Maintenance includes the costs of following the manufacturer's recommended service schedule. This amount is based on national average labor costs of $84 per hour, plus replacement parts and service items purchased at the manufacturer's suggested list prices.
• State Fees - State Fees include title and registration fees based on an average of new-car retail sales in all states, the vehicle’s Fair Purchase Price (or MSRP if Fair Purchase Price is unavailable) and an average state sales tax of 6.27 percent.
• Insurance - Insurance costs assume a driver with a clean record, using the vehicle for personal use. Quoted coverage includes liability, physical damage protection and (where applicable) personal injury, based on the most-often-selected limits and deductibles.
• Financing - Financing assumes a buyer with Tier I or II credit, a loan APR of 3.99% and 10% down payment based on Fair Purchase Price (or MSRP if Fair Purchase Price is unavailable) without any rebates or incentives.
• Fuel - Fuel Costs are calculated using U.S. EPA mileage data for each make, model and style, reflecting 45% highway driving and 55% city driving. Kelley Blue Book updates these costs every 60 days based on actual and forecasted fuel costs.

Hover to see more detail or see Full Definitions

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Article: 2012 Total Cost of Ownership Awards

Article: Why Cost of Ownership Matters

Infographic: 2012 Total Cost of Ownership Winners

How Does It Help You Compare Cars and Choose Wisely?

Let's say you have two cars in mind. They may cost about the same to buy, but one will cost you thousands more in out of pocket costs and depreciation over the initial 5 years of ownership. We help you compare and prepare.

Sample Sedan A

Purchase Price: $19,272

Out of
pocket

$22,633

Loss in value

$13,365

5-year Cost of
Ownership $35,998

Sample Sedan B

Purchase Price: $19,272

Out of
pocket

$23,965

Loss in value