Initial cost is not the only thing that makes a car an economical purchase. It's actually the long-term investment aspect that plays the biggest role. A cheaper vehicle up-front may, in actuality, cost more to maintain over its lifespan.
“Car shoppers should take the time to compare vehicles on their consideration lists to fully understand the financial implications involved with cost of ownership,” says Juan Flores, director of vehicle valuation for Kelley Blue Book. “While a vehicle might be less expensive up front, the cost of fuel for that model, insurance and other expenditures could make it the less appealing choice for their wallet in the long run.”
Forbes recommends doing thorough research before making a purchase. They consulted Kelley Blue Book, which recently announced its inaugural Total Cost of Ownership Awards. The kbb.com website focuses on these variables of cost, among others:
1) Depreciation Value: How will the car hold up over time? kbb.com bases its predictions on historical data (how the model has performed in the past) and economic factors.
2) Fuel Economy: Gas is expected to rise going into the summer months. Significant amounts of money can be saved by buying a more fuel efficient vehicle; estimates put savings due to fuel costs at close to $900/year. That's close to $4500 of savings over the standard 5-yr span.
3) Auto Insurance: Insurance is mostly based on the driver's past experience, age, credit rating, address, etc., but it is also based on the model of the car. Luxury brands and sports cars tend to have higher insurance costs to start, while family minivans and SUVs will have a lower starting insurance cost.
According to kbb.com, the Best Brand for 2012 in their Total Cost of Ownership Awards is none other than Kia. Kia is sweeping the Unites States car scene off its feet with its stellar fuel economy and resale value. The Kia Soul heads KBB's Compact Car category because "its lowest-in-category fair purchase price matched with outstanding fuel and insurance cost figures combined to give it nearly a $1,300 advantage over the Hyundai Elantra."
In the Mid-Sized car category Kia and its sister company Hyundai switched places; the Hyundai Sonata beat out Kia's Optima to win the top spot. Similarly, the Hyundai Santa Fe outpaced the Kia Sorento in the Crossover category "based on its combination of lowest fair purchase price and lowest long-term depreciation coupled with lower maintenance and insurance costs."