Applications for Study Data

Applications for Study Data


Choosing Your Next Vehicle: Choice of an
automobile--full-sized, intermediate, compact, or
subcompact--is based on more than the consideration of cost.
For the motorist who needs the space provided by the full-sized
car because of a large family, car-pool needs, or equipment to
be carried, the economic and size advantages of smaller cars
must be foregone. If space needs are not compelling, cost
considerations may lead the motorist to choose a smaller car.
Dollar depreciation, financing and fuel costs are substantially
lower for subcompacts and compacts. Also, repair costs
generally are lower for smaller cars, tires cost less, and, in
some States, registration fees are lower. Non-cost advantages
are maneuverability in city traffic and ease of curb parking.
The advantages of larger cars in capacity, comfort, safety and
possibly status can be compared to the dollar costs incurred to
obtain these benefits.

To some degree, the purpose for which a vehicle is used
and the circumstances of its use will dictate the vehicle-cost
pattern.

When To Trade In: There is no set answer to the question
of when to trade in or to sell a vehicle. Monetary
considerations are only part of the answer. Vehicle style,
size, mechanical features, dependability, as well as the
availability of money. are also factors in the decisions
regarding when and which vehicle to purchase. A vehicle owner
can minimize the depreciation costs by keeping the vehicle
longer. The "annual trader" drives a current model vehicle all
the time, but depreciation for the intermediate-sized car will
cost about $52,000 over a 12-year period (12 times the first
year depreciation). A "two year trader" pays about $34,000 in
depreciation. This is a saving of $18,000 from the "annual
trader's" costs, and even more can be saved by becoming a
"three-year trader." Of course, consideration must be given to
the outlays for necessary repairs and replacement tires when
the vehicle is kept longer.

Once the vehicle-use pattern is determined, the owner may
be able to relate costs to those shown in this report and to
decide when it will be most advantageous to trade vehicles. Of
course, comfort, dependability, and appearance are important to
most vehicle owners, and these weigh heavily in the purchasing
decision.

Ridesharing is another effective way to reduce automobile
expenses . . . The cost for an intermediate car operator by a
single driver is 33.25 cents per passenger mile compared to a
cost of 8.31 cents per passenger mile for the same car with 4
occupants.

Business Use Of Vehicles: This study is not intended to
establish the basis for determining an appropriate
reimbursement for costs associated with use of an employee's
personal vehicle for business purposes. The results of the
study may be useful as a general guide for determining
reimbursement rates; however, many factors, such as higher
annual mileage and special requirements pertaining to purchase
or upkeep of the vehicle related to use for business purposes
should also be taken into account. Information concerning
reimbursement for private vehicle use can be obtained from
business travel advisory services that have made studies of
costs for specific vehicles and groups of vehicles under
various conditions of use.