Yes, there's always the lowest price, but car shoppers looking for the best possible deal are also well served to take a look at 5-year operating costs. A new entrant to the cost of ownership game, Kia earned the Kelley Blue Book honor of offering vehicles with the lowest overall cost to own over a 5-year period.
KBB.com's 5-Year Cost tool debuted last July, along with its complete site redesigned. KBB, known mostly for trade-in and resale pricing, jumps into the game that has been the territory of Intellichoice, Edmunds.com and VinCentric. KBB uses its own unique reporting method of paring its pricing data with key factors including KBB residual values, fuel costs, insurance, financing, maintenance and repairs.
KBB believes that Kia, a brand known for value pricing, shows strongest as an overall brand for several reasons. Kia's parent company, Hyundai is No. 2 on the lowest 5-year cost, and both brands have enjoyed a considerable decrease in the highest cost factor for new cars - depreciation. For the average Kia, a company that saw an increase of over 4% in resale on a 60-month timeframe, that averages to just under $1,000 per car. This puts Kia and Hyundai in rare air. With average vehicles typically maintaining about 30 percent of original MSRP after five years of ownership, only a select few maintain at more than 45 percent, according to KBB analysts.
Amanda Frayer, an analyst for KBB vehicle valuations, says the increase in resale value has helped put both Kia and Hyundai on the radar. "Undoubtedly, the raise in residual value has helped both brand secure their leadership places in the TCO comparison." Coming in third on the list was Honda. KBB attributes Honda's strength to its strong fuel economy and customer loyalty, both of which lead to higher resale values.
Beyond depreciation, fuel and insurance make up the other two big hits. Since these costs are constantly in flux, KBB plans to update the numbers every 60 days, taking fuel costs and insurance rates into consideration.
For luxury brands, Audi makes the list for the top brand due to its low depreciation and fuel economy. KBB touts Audi's A3 2.0T and A4 2.0T sedans as the driving force behind the win. Second and third in this category are Lexus and Cadillac.
5-year costs can be found on a tab in the pricing tool for individual new vehicles on the KBB.com website. The tool shows a handy pie chart for each of the cost factors and a spreadsheet detailing the exact cost of each factor by year. KBB is happy with the results. Frayer says, "I think this is such a useful tool for consumers, to tell them not only what they can buy the car for upfront, but what they really should expect to pay on a longer term basis."