How much does it cost to run a modern day crossover 4x4 SUV?


For example the all new BMW X3 announced this month. It looks good, doesn't it? The new BMW X3 is larger and more spacious than its predecessor. It's better to drive and more fuel efficient. Importantly, it achieved 5-stars in the Euro NCAP crash test. But what will it cost?


Let's take a DIM view, Depreciation, Interest and Maintenance.


Surprisingly the BMW X3 won't cost too much to tax and fuel. Car insurance, tyres, brakes and servicing will cost you but are subject to shopping around. Let's get some detail.


First things first, we're all concerned about the fuel consumption. The BMW X3 combined fuel consumption is 50.4 mpg. That's the same as a Ford Fiesta 1.25 82PS petrol engine. A 50.4 mpg diesel engine is going to cost you about £1,200 per 12,000 miles. Yeah I know, amazing given the X3's top speed and single figure acceleration to 62 mph. Prepare to be further amazed.


The X3 emits 149g/km COs which means you only pay £125 VED per annum  for the right to drive this beast on public roads.


OK, that's all the good news.


The outgoing X3 was 30-40 in the new car insurance groups 1-50. Part of the justification for replacing the old car insurance groups 1-20 was the growing variations of car models, especially crossover cars, 4x4s and SUVs. Some will move up or down the ranking. Hopefully the new X3 should be viewed favourably. The new X1 is 22 - 26. A driver with the right no claims discount and postcode should find premiums the right side of £1,000 despite premiums rising sharply this year.


Tyres, brakes and servicing are not cheap but there are always deals to be had. You might be able to keep the annual cost down to around £600 but it could easily be higher.


The sub-total so far for running costs is about £2,925 per year which is about £800 more than it costs to run a small 1.4 petrol hatchback. But what about interest charges and depreciation?


At the moment, money cost about 6% APR which is roughly 3% flat per year. 3% of £30,000 is £900 per year. If you pay cash you will have a slightly lower opportunity cost.


The real expense in motoring is always the hidden horror of depreciation. The used car market is a real market place with many buyers and sellers and values rise and fall. As a guide, if you bought a £30,000 X3 three years ago you'd be lucky to get half your money back today. A loss of about £5kpa. However, you could get a third of the price back if the car was kept 6 years. A loss of £3kpa.


The new X3 should have better depreciation than the old one. Another point is, why change it? The new X3 is prestigious, spacious, comfortable, quick, fast, economical and safe. Would you really downsize it when you're getting 50 mpg already, for a bread and butter cramped sluggish smaller car?


If you ignore depreciation an X3 might cost as little as £70 per week to run at 12,000 miles per annum. That can't be right can it? You best check.


Regards
Ralph