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It’s costing more to own and operate a vehicle, study shows

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SALT LAKE CITY — For the second straight year, it's getting more expensive to own and operate a vehicle.

Higher depreciation rates coupled with increasing tire and gas costs are fueling the expenses, according to new research from AAA. Its report estimates the overall cost of owning and operating a typical new sedan in 2011 at 58.5 cents per mile, up 1.9 cents from 2010. For a car driven 15,000 miles a year, that amounts to a near $300 increase to $8,776 annually.

The rising cost of petroleum is driving up the expense of manufacturing tires, said Jeannette Peck, the director of purchasing for a local manufacturer. Peck purchases raw rubber from Vietnam and Indonesia. She said an important binding agent in tires, carbon black, is becoming increasingly difficult to purchase partly because it's a byproduct of petroleum.

"It's very difficult to get," Peck said. "They're telling me how much I can buy."

Carbon black is a superior to another binding agent, silica, because it's more durable and lasts longer, Peck said. The cost of synthetic rubber used in tires has also gone up by 43 percent, she said.

A tariff the United States placed on Chinese tire imports in September 2009 has also contributed to the rise in tire prices, Peck said. On average, tire prices are up 15.7 percent, said Rolaynne Fairclough, the spokeswoman for Utah AAA.

Fairclough also said depreciation costs have risen 4.9 percent, costing car owners that drive 15,000 miles a year an average of $3,728.

The purchasing director of a local car parts store, who asked not to be named, said prices for parts at his store have increased 3.5 percent because prices for metal and plastic have risen. A radiator shop owner who also asked not be identified, said after holding prices for two years, he's finally had to raise prices for radiator parts by 10 percent.

The AAA study indicated maintenance costs will actually be down 2 percent this year, a prediction supported by at least one sales manager at a local shop.

"People are really shopping around and really driving down the cost," he said, asking not to be identified to protect the interests of his company.

He said he hasn't actually lowered prices to be competitive, but price matching has lowered his profit margins.

AAA's study looked at average operating and ownership costs of five top-selling models including small, medium and large sedans, four-wheel drive SUVs, and minivans. Their research showed the annual, average cost of driving a small sedan is $6,758 per year, while a large sedan costs $10,982 per year.

SUV owners, whose vehicles typically get lower fuel economy, saw their average operating costs jump to 74.9 cents per mile to $11,239 annually. Minivan costs also rose, up 1.3 cents per mile to $9,489 annually.

AAA has studied the annual cost of driving since 1950. That year, driving a car 10,000 miles per year cost 9 cents per mile, and gasoline sold for 27 cents per gallon.

Although drivers can mitigate the impact of rising prices by smoothing their driving habits, driving less and keeping tires properly inflated, they have no control over depreciation costs, Fairclough said. Drivers are usually responsive to changes in prices and drive less when costs go up, she said, pointing to 2008 when drivers cut back on driving significantly.

"We haven't seen a high uptake in miles driven (since 2008)," Fairclough said.

Email: sgarn@desnews.com