Ownership Costs Methodology

Primary sources

AAA's annual 'Your Driving Costs' study is the industry benchmark for per-mile cost components (fuel, maintenance, tires). We use the latest published version and update annually when AAA releases new data. IRS Revenue Procedure 2024-14 provides the standard mileage rate (67 cents/mile for 2024), which we cite as a cross-check against component-sum calculations.

Insurance cost benchmarks come from NAIC (National Association of Insurance Commissioners) average premium data by vehicle segment. Individual premiums vary by driver profile — we model segment averages and allow user override.

Depreciation methodology

Vehicle depreciation follows a declining-balance curve. The first-year drop averages 20% of MSRP per NADA and CarFax aggregate data (segment-specific ranges: luxury 25-35%, trucks 15-20%, economy 18-22%). Years 2-5 average 10-15% per year of remaining value. We model this as an exponential decay with segment-specific parameters calibrated against NADA Used Vehicle Guide wholesale values.

Residual value at Year N is modeled as MSRP × (1 - first_year_rate) × (1 - annual_rate)^(N-1). This matches the NADA depreciation curve within ±5% for most mainstream segments.

Fuel cost derivation

Fuel cost = (annual_miles / MPG) × price_per_gallon. We source national average gasoline and diesel prices from the U.S. Energy Information Administration (EIA) weekly retail prices, updated when we refresh calculators. Users can override with local prices.

Limitations

Depreciation curves are averages. High-demand models (trucks, EVs in certain markets) may depreciate slower than the curve. Dealer maintenance packages, extended warranties, and tire subscriptions are not modeled. Insurance for high-risk drivers is significantly above NAIC averages.

Update protocol

This category is reviewed quarterly. Immediate updates are triggered by changes to the primary source documents listed in the citations above — rate table revisions, new agency guidance, or regulatory amendments.

Error reports go to info@bedrockatools.com. Corrections are published on our corrections page.