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Cheapest Cars to Own

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I was reading an article the other day, how the proposed California bullet train would be a bargain in travel. The price to go 438 miles would be $86 or around 20 cents a mile. Other cheap trains are usually around 25 cents a mile, but a mid-range one can be 50 cents a mile (Amtrak's Acela is a good example).

I don't take a train to many places, but this got me thinking, "How much does a car cost per mile?" The IRS makes it clear that you can deduct 57.5 cents per mile for business use. That's a rough starting point, but we know that car prices and gas mileage varies widely.

What I really want to know is what is the cheapest car to own. Pretend I wanted to be as frugal as possible and didn't care about anything else, what should I get? The easy answer is some used piece of junk that will hopefully last a couple of years from someone who just wants to get rid of it. I had an old school teacher who would do that. He'd never get an oil change, because it simply wasn't worth it. I'm not going to take the easy answer, because finding a used car cheap and reliable is going to depend on the gems in your local area.

I really like the cost-per-mile metric as it gives you a way to compare to the bullet train and other forms of transportation. I did some searching on the web and of course one of my favorite personal finance gurus Clark Howard has it covered. He points out research in 2014 from Consumer Reports that says the Toyota Prius and the Honda Fit were the cheapest cars at around 40 cents a mile. The most expensive was a Ford F-250 which was a $1.16 per mile to run.

Think about driving 15,000 miles in each. Would you rather pay $6,000 a year for your car or $17,400? Obviously they are completely different cars, but unless you have a lot of truck-stuff to do, you can give yourself the equivalent of a before tax raise of $15,000 by going with the cheaper option. That's not only serious cash, but it is "fund your early retirement" kind of cash.

If you drive a lot, there's some great math on Green Car Reports. They take the cheapest cars with very, very good gas mileage and create a "Cost per MPG" to give you something would certainly be extremely frugal. The winner was the 2015 Mitsubishi Mirage CVT which costs $14,805 and gives you 40 MPG. I worked up a little spreadsheet on that and it will cost you around 27 cents a mile for the car and gas... assuming you drive 15,000 a year. That's using a 5-year average. If you hold on to it for 10 years it gets down to 17 cents a mile. None of this includes insurance, but that would presumably be cheap on such a cheap car.

Car and Driver has a nice list of cheapest cars to own as well. Their top bargain is the Nissan Versa 1.6 Base which costs around $10,000 and gets 29 MPG. Using the same assumptions as I did with the Mitsubishi Mirage above, the Nissan would be around 24 cents per mile. The initial low cost saves you more than you'd save on gas unless you drive more than the 15000 miles a year.

There really should be an easy calculator that allows you to enter your driving habits and gas prices in your area to give you some kind of real cost of operation. I have to believe it exists on the internet, but I couldn't find it. In any case, that bullet train looks like a pretty good deal, but a car becomes the better option if you have multiple people to transport.

Posted on June 16, 2015.

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6 Responses to “Cheapest Cars to Own”

  1. robyn says:

    excluding the actual cost of the car, my 2007 Honda Accord costs me about 33 cents per mile, based on $500/yr insurance, $2000/yr maintenance and repairs, driving about 12000 miles/yr. If i add in the purchase price of the car, $22000 divided by 104,000 miles [to date] that’s another 21 cents per mile. longer i own the car, lower that will go.
    if i prorate everything over the 104,000 miles to date, $53,750/104,000, it comes out to 52 cents/mile, AND that includes a time period where i was racking miles at $3.50 to $4/gal!
    Honda Accord: reliable, carries 4 people and luggage, takes a licking and keeps on ticking.

  2. Paul N says:

    I agree with robyn’s numbers. I feel your also looking at this totally the wrong way.

    If your buying to save money as your main reason, cross off buying a new car right away.

    There are a lot of good used cars out there. I personally have run my last used car to 488,000 kms (from 180,000) and the one I have now just rolled over 470,000kms (from 232,000) and still runs great. Both were higher end models of their brands. People give up on cars way too early. They worry about 1 or 2 “bigger” repairs for maybe 2 grand but will easily fork over $300.00+ a month for 6 years for a lease or payment on a new car? (for a false peace of mind). New cars break too, and some of the first services and fluid changes are insane $ now)

    Lastly you have to subtract the money the car saves you over the same time period. You have to give your lost time an hourly value as well. Waiting for the bus, using cabs, airline limos, losing an hour on each end of the day with your family. Take a trip with the train, how do you get around when you get to your destination? I would usually rent a car. Anyone ever tried that on peak season in sunny destinations? You might be pretty shocked when car rental companies ask for $1200.00 + for 1-2 weeks. 4 train rides 4 tickets, you can get 4 people in one car last time I checked…

    Some memories on a car road trip are difficult to replace. Sometimes these trips become your most cherished moments. Not 4 people standing in the rain waiting for a bus with their luggage… Yea that’s the trip I want to go on…

    • Lazy Man says:

      Paul, I thought I wrote enough about how buying used will save you the most money, but I didn’t want to get into anecdotal local deals. I agree with you that people give up on their cars too early.

      I agree with you that waiting for buses really isn’t fun. I will say that I took my first couple of Ubers this past weekend and it was cheaper and just as easy as a cab. It worked well as an alternative to renting a car.

  3. Andy Hough says:

    Buying a used fuel-efficient car can result in a very low cost per mile. I owned a 97 Camry from October 2009 to May 2012 and kept track of all the associated expenses. Purchase price, insurance, registration, parking, repairs, and car washes were all tracked as part of the price of the car. My total cost per mile ended up being 16.8 cents per mile. I doubt I would ever be able to drive a new car long enough for the cost per mile to be that low.
    Here is the post link if you’d like to see more details. http://tightfistedmiser.com/2012/08/30/my-total-cost-of-car-ownership-16-8-cents-per-mile/

    • Lazy Man says:

      Holy crap… that is very impressive. The only thing I can think doing as well is a more efficient car nowadays that is still used. For example some of the cars I mentioned were cheap and probably still have a lot of resale value while using very little gas.

  4. […] – allowing me to push back the purchase of a new(er) car by a few years.  Lazy Man wrote about the cheapest cars to own a few months back.  The very cheapest cars to own cost about 40 cents per mile.  40 cents per […]

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