Friday, April 9, 2010

Sixtyandsingle: The cost of owning a car is going up, AAA

An ugly piece of gravel crashed into my pickup truck windshield last week while driving eastbound on Interstate 84 in Portland. The impact was so great that the chip immediately turned into a spreading crack that by the next day had migrated more than two feet across the passenger's side of the glass. This is damage that I can't tolerate. I don't know for sure, but it might even be dangerous. So I've got a call into my insurance company to find out what to do. Owning a vehicle is among my largest expenses in retirement, right up there with my mortgage. According to AAA this week, those costs are going up even though the over all cost of living is relatively tame. Fixing a cracked windshield is just one example of those costs.
According to AAA's annual "Your Driving Costs" report the cost of owning and operating a vehicle rose an average of 4.8 percent in the past year to an estimated $8,487 or 56.6 cents per mile based on 15,000 miles of annual driving. That's if you own a sedan. Larger SUVs and trucks are more expensive depending on fuel efficiency and miles driven.
Rising fuel prices were a key factor in the cost increase this year, AAA said.
Here's another trend: Paying more at the pump is not only increasing the operational costs of vehicles, but it's also affecting depreciation values, said John Nielsen, AAA director of Auto Repair and Buying in a statement. The growing appeal of more fuel efficient vehicles has meant small sedans are experiencing less depreciation and holding their value longer. That's while less fuel-efficient vehicles are seeing greater depreciation.
Here's the breakout:
- Cost per mile of a small sedan is estimated at 43.3 cents per. That adds up to $6,496 per year based on 15,000 miles driven per year.
- Cost per mile of a 4WD SUV is estimated at 73.9 cents a mile or $11,085 per year based on 15,000 miles of driving. Go to AAA.com/PublicAffairs to download the 2010 report.
Increases in fuel, tires and insurance were the primary factors causing the rise in all categories of vehicles,  AAA said At the time of the Your Driving Cost calculations, the AAAFuelGauge Report listed the national average cost of regular unleaded gas as $2.603 per gallon, that was 12.7 percent higher than the cost of fuel in the 2009 study.
The average costs of full coverage insurance on sedans also rose 5.7 percent over last year, while tire cost increases averaged 8.7 percent.
Bad news, I just got a call back from my insurance company. My policy does not cover the cost of replacing my windshield because of my high $1,000 deductible. No special dispensation for windshields. In preparation for retirement, I cut my insurance bill last year by $100 a month, so I still think I'm coming out ahead even if this costs me several hundred dollars. I'll keep you posted.





http://www.fuelgaugereport.com/

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