Vehicle Depreciation Accounts for 32.9 Percent of Total Cost to Own and Operate a Vehicle; Rate of Depreciation Continues to Decrease YOY
Motus, the premier vehicle management and reimbursement platform, today released its 2019 Cost of Vehicle Ownership Trend Report, which reveals how new vehicle prices, residual values and depreciation directly impact the costs of owning and operating vehicles. The report found that depreciation accounted for 32.9 percent of the total cost to own and operate a vehicle over the past 12 months.
“This is a slight year-over-year decrease and establishes a three-year trend of gradual decreases in the rate of depreciation, representing an eight percent improvement since 2016,” said Ken Robinson, market research analyst for Motus. “With this in mind, Motus predicts that depreciation will decrease between half of a percent and one percent over the next 12 months.”
The report also takes a close look at the market trends that are influencing these vehicle ownership expenses. For example, consumer preference is a significant contributing factor to vehicle prices, which increased steadily in recent years. In 2018, the average price for new vehicles in the U.S. was around $36,000. This is about three percent higher than the average sale price in 2017.
“Costs and spending trends affect the way people spend their money, which in turn influences how businesses behave. For example, vehicle depreciation can have a big impact on employees who drive for work every day, as every mile driven affects the residual value of a vehicle,” said Craig Powell, CEO of Motus. “It’s important for businesses to account for fluctuations in trends like these because they have a direct impact on the costs of owning and operating a vehicle. With Motus, employers can account for these trends to ensure that they are fairly and accurately reimbursing their team for miles driven for work.”
Additional findings in the 2019 Cost of Vehicle Ownership Trend Report include:
- The demand for SUVs has never been higher. Forty-eight percent of all car owners who bought new vehicles in 2018 chose SUVs for their next vehicle.
- In 2018, the average sale price for a used vehicle increased by about 2.9 percent to $16,738. This increase was influenced by stronger demand for small and midsize cars.
- Consumers should expect new car prices to increase by about two percent in 2019. Higher new vehicle prices are a result of increased production costs for improvements, including more fuel-efficient engines and transmissions and lightweight body materials.
- The price of all new vehicles could be impacted if the U.S. enacts tariffs on auto parts. Analysts estimate that would add between $4,000 – $6,000 to the price of new vehicles.
- Vehicle owners should expect a slight decrease in residual vehicle values between 0.5 percent and one percent over the next 12 months.
- The overall cost to own and operate a vehicle should decrease from 0.6 percent to one percent over the next 12 months.
To access the full report, please visit: https://resources.motus.com/reports/motus-2019-cost-of-vehicle-ownership-report
Motus is the definitive leader in mileage reimbursement and driver management technologies for businesses with mobile workers and fleets of all sizes. Only Motus leverages deep insights captured across the world’s largest retained pool of drivers to calculate personalized and compliant vehicle reimbursements, keep drivers productive and safe, and ultimately maximize returns and minimize risk for all aspects of the mobile workforce. Motus’ expertise also underpins the annual Internal Revenue Service (IRS) business mileage standard, the amount an individual can deduct for business vehicle expenses. For more information about the company, please visit www.motus.com or connect with us on Twitter, Facebook, or LinkedIn.