Today is the 3 year anniversary of the purchase of our 2013 Ford Explorer XLT. Purchased at two years old, 30,000 miles for $28,050, it originally sold for $38,000. The original owner suffered about $5000/year depreciation. Currently with 47,000 miles it is valued at $16,380 by KBB, bringing my depreciation costs to about $4000/year over 3 years.
In addition to depreciation I have spent $1080 on repairs and service which included replacing brakes and rotors and an expensive (500+) routine service (Service level C?). Works out to a yearly average of about $350. Total expenses:
| Item | $/year |
|---|---|
| Depreciation | 4000 |
| registration | 30 |
| inspection | 35 |
| insurance | 1180 |
| repairs and routine service | 350 |
| Total | 5600 |
By far the biggest expense is depreciation. What if you own a higher quality vehicle? We also have a 2005 Lexus LS430, possibly the most reliable car on the road. Original purchase price ~$66,000, now worth ~$12,000 (49,000 miles) for an average depreciation cost of ~$4100 over 13 years. Not any better. And the Lexus is expensive to insure and repair,
How does this compare to car sharing?
I looked up the cost of a family friendly SUV on Turo. Ford Explorers were in the mix and the typical cost was $80-100 per day. Let’s say $100 per day, that would allow 56 one day rentals before breaking even with owning. Sounds compelling given that we only use the Ford for long distance travel when vacationing. Convenience is the other consideration. Sharing/renting is a hassle, having to pick up and return the vehicle, deal with paperwork etc. It is a great convenience to just walk out the door and have a vehicle at your disposal. But clearly that convenience comes at a price. There are inconveniences to owning too - repairs, service, inspection, cleaning etc. Maybe it’s a wash.
Another option is to own and share to reduce cost.