Car Costs SKYROCKET 167% | Episode 1022
About this episode
The hosts discuss a recent study revealing that vehicle ownership costs are 167% higher than most people expect, averaging around $15,000 annually. Key drivers include rising fuel and insurance prices, especially as people keep older cars longer, leading to increased maintenance costs. They explore the gap between perceived and actual expenses, emphasizing the financial impact of depreciation, repairs, and global factors affecting fuel prices. The conversation also touches on leasing advice, particularly avoiding large down payments, and compares specific three-row SUVs like the Mazda CX-90 and Hyundai Sorento.
add-ons
"It'll tell you exactly what that dealers doc fee is, how many add-ons they add to vehicles,"
Add-ons are extra things the car seller might include or try to sell you with the car, like special covers or extra protection plans.
Add-ons are extra products or services that dealerships include with a vehicle sale, such as extended warranties, paint protection, or accessories. These can increase the overall price.
dealer fees
"It'll tell you exactly what that dealers doc fee is, how many add-ons they add to vehicles,"
Dealer fees are extra costs that car sellers add when you buy a car. They cover paperwork and other things the dealer has to do.
Dealer fees are additional charges added by car dealerships on top of the vehicle's price. These can include documentation fees, preparation fees, and other administrative costs.
Ford Bronco
"For example, here on this 2024 Ford Bronco, you can see that they negotiated $3,200 off."
The 2024 Ford Bronco is a type of SUV that is good for driving off-road and has a cool, old-school look. It comes in different versions with different features.
The 2024 Ford Bronco is a modern SUV known for its off-road capabilities and retro-inspired design. It competes in the midsize SUV segment and offers various trims and options for customization.
cost of vehicle ownership
"So this is a lot of the perception versus reality, which is people don't realize quite how expensive it is to maintain and own a vehicle. Obviously, we do a lot of research here on that and we try and provide that information, but owning a car is very expensive relative to what you might think."
Owning a car costs more than just buying it. You also pay for gas, repairs, insurance, and other things that add up over time.
The cost of vehicle ownership includes all expenses related to buying, maintaining, insuring, and operating a car over time. This concept helps understand the true financial impact beyond just the purchase price.
depreciation
"it's not even close, the biggest costs for owning a vehicle, aside from depreciation, which most people don't think about, insurance and gas."
Depreciation means your car loses value as it gets older, so it will be worth less if you sell it later. This is one of the biggest costs when owning a car.
Depreciation is the loss of a vehicle's value over time, which is often the largest cost of owning a car aside from fuel and insurance. It affects the resale value and overall cost of ownership.
insurance
"aside from depreciation, which most people don't think about, insurance and gas. Yes. Without a doubt, insurance and gas, or fuel,"
Insurance is like a safety net that helps pay for repairs or accidents with your car. You have to pay for it regularly, and it can be expensive.
Insurance is a mandatory or optional financial product that protects vehicle owners against losses from accidents, theft, or damage. It is a significant recurring cost in vehicle ownership.
fuel
"insurance and gas, or fuel, those are the two biggest culprits driving up the cost of ownership."
Fuel is the gas or diesel you put in your car to make it go. Paying for fuel is one of the biggest costs when you own a car.
Fuel refers to the gasoline or diesel used to power most vehicles. Fuel costs are a major ongoing expense for car owners and can fluctuate based on market conditions.
used vehicle
"...should influence people thinking about buying a used vehicle versus a new vehicle..."
A used vehicle is a car that someone else has owned before you. It usually costs less than a brand-new car but might need more repairs or care.
A used vehicle is a car that has had one or more previous owners, as opposed to a new vehicle which is sold for the first time. Buying used can offer cost savings but may come with risks like unknown maintenance history.
new vehicle
"...should influence people thinking about buying a used vehicle versus a new vehicle..."
A new vehicle is a car that has never been owned or used before. It usually comes with a warranty and the latest features.
A new vehicle is a car that is being sold for the first time, typically with a full manufacturer warranty and no previous owners. New cars often have the latest technology and require less immediate maintenance.
manufacturer warranty
"at least you're getting the manufacturer warranty, the fuel cost should be less because it's gonna be more fuel efficient, et cetera, et cetera."
When you buy a new car, the company promises to fix some problems for free for a certain time or distance. This helps you avoid paying for big repairs right away.
A manufacturer warranty is a guarantee provided by the car maker that covers certain repairs and defects for a specified period or mileage after purchase, offering peace of mind and reducing repair costs for new vehicles.
ownership costs
"These older used cars, Dad, I mean, they're gonna be racking up a heck of an ownership bill"
Owning a car means paying for things like fixing it, buying gas, and insurance. Older cars usually cost more to keep running because they need more repairs.
Ownership costs include all expenses related to owning a vehicle, such as maintenance, repairs, fuel, insurance, and depreciation. Older used cars often have higher ownership costs due to increased maintenance and repairs.
maintenance and repair costs
"You're making a great point around older vehicles and a higher cost of maintenance and repair costs there as well, but fuel costs are about to go up significantly."
Maintenance and repair costs are the money you spend to keep your car working well and fix it when something breaks. Older cars usually need more fixing and care.
Maintenance and repair costs include expenses for routine servicing and fixing issues that arise with a vehicle. Older vehicles often have higher maintenance costs due to wear and parts availability.
lease deal
""Hey guys, I'm looking for a good lease deal on a three-row P-HEP.""
Leasing a car means you pay money every month to use it for a few years, but you don't own it. It's like renting the car instead of buying it.
A lease deal is a contract where you pay to use a vehicle for a set period, usually with lower monthly payments than buying, but you don't own the car at the end unless you buy it out.
Mazda Cx90
""It's between the Mazda CX-90 and the Hyundai Sorrento.""
The Mazda CX-90 is a big SUV that can fit three rows of people, so it's good for families or groups.
The Mazda CX-90 is a midsize three-row SUV introduced as Mazda's flagship SUV, offering advanced technology and a premium interior.
Kia Sorento
""It's between the Mazda CX-90 and the Hyundai Sorrento.""
The Hyundai Sorento is a big SUV that can carry lots of people, making it good for families.
The Hyundai Sorento is a midsize SUV with three rows of seating, known for its value, features, and available hybrid powertrains.
Mazda Cx30
"My CX-30 rides nicer than that CX-90P have did."
The Mazda CX-30 is a small SUV that is easy to drive and comfortable, making it a popular choice for people who want a practical car with some extra space.
The Mazda CX-30 is a compact crossover SUV that offers a comfortable ride and stylish design, positioned between the smaller CX-3 and larger CX-5 in Mazda's lineup.
PHEV
"that if you're looking for a Pheave, that would probably be a better vehicle than that Mazda CX-90."
A PHEV is a car that uses both gas and electricity. You can charge its battery by plugging it in, so it can drive some distance on electricity alone.
PHEV stands for Plug-in Hybrid Electric Vehicle, which combines a gasoline engine with an electric motor and a battery that can be recharged by plugging into an external power source.
lease negotiation
"...lease negotiation, excuse me. We also have some videos here as well. All the step-by-steps that you need to know about negotiating a car lease are right there."
Lease negotiation is when you talk with the car dealer to decide how much you'll pay each month to rent a car and for how long. You also agree on rules like how many miles you can drive.
Lease negotiation refers to the process of discussing and agreeing on the terms and price of a car lease between the customer and the dealer or leasing company. It involves factors like monthly payments, lease duration, mileage limits, and fees.
EVs
"EVs lower fuel costs, EVs lower maintenance costs, and EVs prices are falling."
EVs are cars that run on electricity instead of gas. They cost less to fuel and fix because they have fewer moving parts.
EVs stands for electric vehicles, which use electric motors powered by batteries instead of internal combustion engines. They typically have lower fuel and maintenance costs compared to gasoline cars.
RoboTaxi
"if you have RoboTaxi, someone's still gonna have to insure that."
A RoboTaxi is a self-driving car that can take people places without a driver. It might change how we pay for rides and insurance.
RoboTaxi refers to autonomous or self-driving taxis that operate without human drivers, potentially changing the economics of car ownership and insurance.
Waymo
"go to San Francisco in the next year and you're gonna see as many Waymo's as normal cars on the roads. It's crazy. Here in Washington, DC, we have Waymo's on the roads"
Waymo makes cars that can drive themselves without a person controlling them. They use special technology to help cars move safely on their own.
Waymo is an autonomous driving technology company and a subsidiary of Alphabet Inc., known for developing self-driving cars and operating autonomous ride-hailing services.
used EV market
"And obviously we have a glut of used EVs that are driving down the cost to purchase a used EV."
The used EV market is where people buy and sell electric cars that other people have already owned. When there are lots of used EVs, prices usually go down.
The used EV market refers to the buying and selling of pre-owned electric vehicles. A surplus or glut of used EVs can lower prices and make them more accessible.
bundled leases
"And to be clear here, car subscriptions were just like bundled leases with all your payments factored,"
A bundled lease means you pay one monthly amount that covers the car, insurance, and upkeep, so you don't have to pay for each thing separately.
Bundled leases refer to lease agreements where multiple costs such as insurance, maintenance, and taxes are included in the monthly payment, simplifying the ownership experience.
reverse import
"with plan to reverse import US-made integrals and passports... Reverse importing to Japan?"
Reverse import means bringing cars made in one country back into the country that originally made them, even if they were first sent somewhere else to sell.
Reverse import refers to the practice of importing vehicles back into the manufacturer's home country from markets where they were originally exported. In this case, US-made Acura models are being imported back into Japan.
Acura Integra
"...so the fact that they're going to import the new Integra Type S into Japan with a left-hand drive instead..."
The Acura Integra is a small sporty car that people like because it’s fun to drive and also useful for everyday trips. Usually, cars in Japan have the steering wheel on the right side, but this new Integra Type S is coming with the steering wheel on the left side, which is different and special. This makes the car stand out and shows that the company wants to sell it to people who like sporty cars all over the world.
The Acura Integra is a compact sports car known for its blend of performance and practicality, originally popular in the 1990s and recently revived with modern updates. The mention of importing the new Integra Type S into Japan with left-hand drive is notable because Japan typically uses right-hand drive vehicles, making this an unusual and interesting choice for enthusiasts. This highlights Acura's intention to appeal to a global audience and maintain the car's sporty heritage.
left-hand drive
"the new Integra Type S into Japan with a left-hand drive instead of right-hand drive"
Left-hand drive means the steering wheel is on the left side of the car, which is normal for places where people drive on the right side of the street. Some countries use the opposite setup.
Left-hand drive refers to vehicles where the steering wheel is on the left side, typical in countries where cars drive on the right side of the road. This contrasts with right-hand drive, common in countries like Japan and the UK.
exchange rates
"to positively impact some of the tariff and exchange rates that are going on in the world at the moment."
Exchange rates tell us how much money from one country is worth compared to another country's money. This can change how much it costs to buy cars from other countries.
Exchange rates determine how much one currency is worth compared to another, impacting the cost of importing and exporting vehicles. Fluctuations can affect automakers' pricing and profitability.
tariff
"to positively impact some of the tariff and exchange rates that are going on in the world at the moment."
A tariff is like a tax that a country charges when cars or other things come from another country. This can make cars more expensive.
A tariff is a tax imposed by a government on imported goods, which can affect the price and competitiveness of cars shipped between countries. Automakers often strategize to minimize tariff costs.
production in the United States for export
"And so even Toyota and Nissan are starting to look at ways to produce some of the vehicles here in the United States and ship them back to the home market in Japan."
Some car companies build cars in the US and then send them to other countries like Japan. This helps them save money on taxes and other fees.
Some automakers produce vehicles in the United States and then export them back to markets like Japan to take advantage of trade policies, tariffs, or currency exchange benefits. This strategy can improve cost efficiency and market access.
Acura Legend
"...like when Acura came out and they had the legend."
The Acura Legend was one of the first fancy cars made by Acura. It was a nice, comfortable car that helped make Acura popular.
The Acura Legend was one of Acura's first models, introduced in the mid-1980s as a luxury sedan. It helped establish Acura's reputation for quality and performance in the luxury car market.
dealer ratings
"CarEdge.com slash dealer ratings. So for those of you that are unfamiliar, if you go to just CarEdge.com, you can click on research right here, and then click on dealer ratings. Dealer ratings right there. Okay. On this page, you can do a couple of things. One is under dealers, you can browse by brand. That would be able to get us to just, what was it, Ford, Dad? Ford, yes."
Dealer ratings show how good or bad a car dealership is based on what other people say. This helps you find a trustworthy place to buy a car.
Dealer ratings are evaluations or reviews of car dealerships based on customer experiences, service quality, pricing transparency, and other factors. They help buyers choose reputable dealers when purchasing vehicles.
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