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December 10, 2008


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Thanks for the great article - that is not a take that I've heard on car costs before! I'm saving up for my first new car, but even with insurance considerations taken into account, I'd still rather drive a smaller car for environmental reasons.

Thanks for the article, FMF. I had not seen a comparison like this... good info.

However, in regards to your reason #3... safer for who? You, or the person in the economy car who has a near death experience from what otherwise would have been a minor accident with two small cars?

Wow, $1700 to insure a mini? Full coverage on a 3yr and 4 yr old car only costs $1200 total (one is a minivan and the other an economy car). Insurance is slightly more ($50) for the small car, but it's book value is 40% higher too. And this is in Masachusetts...not exactly known as the cheap insurance capital of the world.

I know that Honda's have a high theft rate and probably so does a MIni...that may make the comparison somewhat unrealistic. Nonetheless the analysis does need to be done and most people do not pay attention to the total cost of ownership.

Interesting comparison. I wonder about the psychological costs, though. Our mental accounts for "gas" vs "insurance" are different and while it may be objectively true that the break even point is higher than you think, small daily costs versus lump sum costs have different hedonic qualities. That is, I'd be happier to pay one big insurance payment than many small higher gas payments.

One other thought is that you have some negotiation room and a number of options with insurance. My guess is that the average price paid for insurance is higher than what you could find with a little diligence. You can also do things like modify your deductible and coverage based on the amount of risk you are comfortable with. On the other hand, you're not going to negotiate gas costs and even shopping around won't usually save you much, if any in comparison.

We pay about $450/year to insure our 2007 Honda Civic. That's full coverage with a $1000 deductible on collision and a $250 deductible on comprehensive.

I'm amazed that no one considered the cost of the vehicle itself. The Mini/Siena is obviously a close one (probably the Siena is cheaper) but Civic/CRV is not... whit the CRV several thousand dollar more expensive than the Civic. So, my conclusion is: take all the costs into consideration: purchase, gas, maintenance, warranty, insurance, etc.

Are you moderating comments now? I tried to post a comment and it said something about having to be approved and possible spam.


OK.. well that last comment went through fine. I'm guessing my other post got held up for review since it had a couple links in it.


I would second Bruno's thought in that you have to look at total cost of ownership. IMO, smaller cars are going to win almost always. The article also chose some suspect comparisons. A CRV is not exactly a huge vehicle. The mini cooper is made by BMW (expensive). Show me the Tahoe is cheaper than the Civic and I'll be impressed. :-)

You do have some leeway with insurance costs. I saved more than 30% by switching insurance companies.

Wow, my 2004 MINI costs less than $1100 to insure. That's a big difference.. and yet another case for used cars.

A third for Bruno's post. The purchase price on the vehicle is huge...especially since you have to pay it all upfront. I found the insurance difference was pretty small compared to the price on a larger vehicle. Another thing I found out is two-door cars are more expensive to insure than four-door. My previous car was Ford Taurus SHO but my insurance didn't treat it like a sports car simply because it had four doors.

I don't care about the higher insurance costs. I was getting rid of a Ford Ranger, which is an extremely cheap vehicle to insure, and needed a new car anyway. No matter what I did, my rates were going to go up. So, I found a car that fit my needs and bought that. It _is_ small, and it _does_ get good gas mileage, but those weren't the primary reasons that I bought it.

Relating insurance costs to gas mileage/size without adjusting for the value of cars is meaningless. While it is interesting conversation - replacement cost, frequency of theft, and other factors must be calculated in before any comparison on MPG. Find cars with different MPG, and of similar cost, theft issues, etc and then you might be able to make your point. However, I bet if you adjusted for those factors any relationship between insurance cost ad MPG would disapear!!! This is an absolute misuse of statistics and unworthy of print. People should be more responsible about what they write.

A MINI isn't exactly the average small car. I have a 2008 Hyundai Accent, and I pay around $1,000 for insurance annually. And that's in the metro Boston area, with higher-than-minimum liability coverage and a $500 deductible. (With a $1K deductible, I'd have paid under $800, but the death throes of my old car killed my emergency fund and I was feeling risk-averse. I'm planning on switching up to the $1K deductible next year.)

I also would argue that not everyone feels safer in a larger car. I feel much safer in a small, maneuverable car with good steering and road handling. SUVs, which mostly have suspension built on small-truck frames, feel unsafe to me. I can't maneuver in them.

Interesting. My wife and I prefer our solution. Two older, well-maintained, small cars that get over 30 MPG. Insurance cost is under $400 for both cars. Of course, given that the cars are older, we've only got liability coverage.

-Good gas mileage
-Low insurance
-Low cost to purchase (we bought used)
-Still new enough to have driver & passenger airbags

-Some maintenance to keep after (I can do some basic things myself)
-Greater chance of the car leaving you sit than with a new one

All in all, it's worked out quite well for us to buy used cars and take care of them.

According to the total cost of ownership for a Mini is $23,175 for the Sienna it is $35,000. This includes gas, depriciation, loan costs, insurance repairs and maintenece.

It is all the little things that you don't think about when all you care about are the payment amount and the fuel milage.

Check out the ownership costs from the link below.

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