In our analysis, we utilize seven major ownership cost categories. All of the major ownership costs can be divided into two categories: standing costs and running costs.

Standing costs, also called fixed costs, are what you pay to own the car whether or not you ever take it out of the driveway. These costs include depreciation, insurance, financing and various government fees. (We do not factor into our analysis the cost of garaging your car, but if you live in Manhattan or downtown San Francisco, keep in mind that this expense can substantially add to your car’s standing cost.) The good news about standing costs is that they usually decrease with time. Depreciation is less each year, insurance premiums may decline as the value of the car decreases, state fees usually decrease on older cars, and finance charges will be eliminated once you pay off the loan.

Running Costs, or variable costs, are the costs you bear every time you take your car out of your garage. They include fuel, maintenance and repairs. (Bridge tolls, occasional parking fees - and when you’re naughty, traffic tickets - are running costs as well. However, they vary too greatly and depend on the driver too much to be considered in our analysis.) Running costs tend to rise as a car gets older. But remember that standing costs usually shrink over time. Usually, the increase in running costs is outweighed by the decrease in standing costs, so overall the car is less costly to own and operate when it becomes more "experienced" - a good reason to hang on to your car for a number of years after you buy it. For example, after age five or so, the car may require more repairs but depreciation costs will fall to a relatively small amount - and the car should be paid off.

Standing Costs                   
Depreciation
Insurance
State fees
Financing
Running Costs
Fuel
Repairs
Maintenance