by Nigel Holmes

Created on: December 05, 2009

People look for different things in their vehicles - practicality versus style for example, or load-hauling ability versus the size of the garage available for parking - but there are two factors which every buyer agrees are critical: running costs and reliability.

Looking at running costs first, the most significant are depreciation, financing, insurance and gas.

The typical new car loses around 50% of its value in the first three years, 65% after five. Don't think that you can avoid this by leasing because depreciation is factored in to the monthly fee. After all, the leasing company needs to make good that loss in value when the car is eventually sold. To minimize depreciation, buy a vehicle with a high residual value such as a Toyota, Honda, Subaru or BMW. Find information on residuals on Kelly Blue Book or Edmunds.

As few people can afford to pay cash, most new vehicles are financed, either through a loan or by leasing. In both cases, money is borrowed and has to be paid back with interest. Minimize finance charges by shopping around for quotes, borrowing from a Credit Union, or buying a less expensive vehicle.

The cost of insurance is related to the value of the vehicle, the cost of repairs, and the perceived risk of the person who'll be driving. Put your teenager in a Corvette and you will pay handsomely. On the other hand, a mature fifty-something driver with no accidents or driving offenses in a Corolla or Focus will find the insurance bill quite reasonable.

Gas, while often seen as a major expense, is actually less of a factor than those already covered. That said, a larger, heavier and faster vehicle is going to consume more than something small, light and slow. It comes down to what type of car or truck you want to drive.

Turning to reliability, while you might want your new vehicle to be quiet, comfortable and fast, the number one priority is that it never lets you down. Modern cars and trucks are much better in this regard than those built even ten years ago, but even so, some are still better than others so it makes sense to check the data.

One of the best known sources in the US is Consumer Reports. They gather extensive statistics from their members on the reliability of almost every vehicle on the road. However, as with all statistics, the data needs interpretation. For example, the severity of a problem depends at least in part on the owner's expectations. Thus the owner of an inexpensive hatchback may be more fault-tolerant than someone who's purchased a luxury sedan.

Another good source of information are the JD Power surveys. Again, this data comes from surveys of owners and so needs to be interpreted. However, while people will quibble over the relative rankings and severity of faults, these do give a good indication of which vehicles are the most trouble-prone. Generalizations are dangerous because any brand can have the occasional problem model, but overall Honda, Toyota and Mercedes have good reputations for reliability while Jaguar and Land Rover have languished near the bottom of the lists for some years.

Many factors ought to be taken in to account when shopping for a new car, but regardless of make or model, you should know the expected running costs and reliability. Check the data and be an informed buyer.

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