Roadsters and Ragtops

What does the car you want really cost over five years?

To know if you can really afford the car you’ve found, you have to look at more than the initial price. You have to estimate the TCO - the total cost of ownership over the five to ten years you will own the vehicle.

TCO cost estimates depend on the specific make and model of car, the amount of miles you will drive, regional costs for insurance and interest rates, and your specific credit and insurance history. There are some web sites that can help you calculate this in detail, but I give you the basics here, but first a word on why convertibles cost more than sedans.

Why Convertibles Cost More

• Modern convertibles have extra internal bracing to make up for the lack of a roof. Although the extra bracing adds cost and weight, it is certainly worth while; older convertibles were known for so much shaking and shimmying of the dash and windshield that the rear view mirror was just a blur.
• Auto makers sell many more sedans and coupes than convertibles, so the special tooling required to make convertibles is spread over a much smaller pool of buyers.
• Since convertible owners actually like to drive, convertibles are rarely ’stripped down’ cars - heated leather bucket seats cost more than plastic covered benches, powerful engines cost more than anemic base engines, big tires, upgraded suspensions, and serious brakes cost a lot more as well.

Those costs alone means it costs more to buy a convertible than a sedan. Exactly how much more? Well, calculating TCO means estimating the variables and adding them up.

Calculating Total Cost of Ownership - TCO

Initial Price

This is still the most important factor since your finance costs, depreciation, and most of your insurance cost is directly related to the initial price of the car.

Dealerships often won’t discount convertibles as deeply as standard cars in the spring when demand is high. A jazzy convertible in the showroom brings in the lookers who may well look longingly at a convertible, before eventually buying another car.

In the fall, dealers discount more heavily, since they don’t want to pay interest on the car all winter.

So remember, always comparison shop several dealers, and the price you pay may depend on when you buy your convertible.

Finance Costs

The interest you pay depends on the rates in your area, your credit history, the purchase price of the car, and the amount you put down. A new or late model car is expensive enough that even if you pay the full price in cash, there are still finance costs involved based on the interest you would have earned in a savings account for five years.

Banks have more trouble collecting on used car loans, so used car interest rates are always higher than new car interest rates. And on a new car, there may be low or even no interest loans available from the manufacturer that can make a new car less expensive than a late model used car financed at a bank’s higher rate.

Insurance Costs

Most states requires only liability insurance; but if the car is financed, more expensive comprehensive coverage is required by the lender. BTW, even comprehensive insurance isn’t really very comprehensive. It covers only the depreciated value of the car, not the car plus the interest. So if you put paid too much or put very little money down and your car is totaled in a few months, you could end up still in debt for the total financed minus the settlement from your insurance company.

In general, convertibles cost more to replace if involved in an accident, so they cost more to insure. Since a soft top is obviously less secure, they carry a higher risk of theft. And convertibles often have more powerful engines and expensive options, so many insurers classify them in a higher risk category.

Insurance companies calculate cost based on their actual claims history by type of coverage, by vehicle class, by region, and by driver. One company may have had a bad experience with claims on a vehicle or in an area while another hasn’t had many claims for the same thing, so their costs can vary widely. Insurance is a big expense, so you must shop around every time.

Especially for young drivers or drivers with a less than perfect record, the cost of insurance can be the greatest part of the total cost of ownership.

Depreciation Costs

Depreciation is the difference between what you paid for the car and what you can sell it for.

Different makes and models have different resale values that change according to market conditions, but convertibles usually depreciate worse than most cars - in fact, resale value usually drops like a pile of rocks for the first five years.

If you buy used this can be an advantage to you. If you buy a new car and keep it a long time, it won’t matter much either way, but if you buy a new car and trade your old car in every few years, depreciation can be the biggest cost of owning any car. Maybe you should consider leasing.

Fuel Costs

Although the extra weight affects performance and gas mileage around town; you will probably not notice it on the highway, since about a quarter of the fuel a car requires at 55 mph is used to run the accessories -mostly the air conditioner - and you won’t be running the air conditioner very often.

Smaller cars, hybrid or all electric cars are available too, but you know fuel costs aren’t going to go down soon, and unlike your payments, fuel costs can double in just a few months.

Maintenance and Repair

Today maintenance and repair costs aren’t so much of a concern, since maintenance on late model cars is pretty minimal and is generally about the same for convertibles as other cars of the same age, make, and model. However, there are still lots of exceptions.

Check the history for the specific year, make, and model you are considering. If you are considering a new car without a history, check the projections by Consumer Reports and other such services. Not all Toyotas are trouble free, not all Volkswagens break down a lot, and a generally low maintenance, but expensive car can cost more than a generally unreliable but inexpensive car just because repairs and parts cost a lot more for the luxury marquees like Mercedes and Lexus. Or Lotus and Massarati.

So there isn’t a huge differance between coupes and convertibles of the same make and model. At least until the top jams or needs replaced, and that could be decades with modern materials and construction. The power top on my amcient Mazda still works like new, although it’s almost 20 years old and the fabric is badly worn where it folds.

A Word on Warranties

Although I just said that maintenance and repairs are minimal on most new cars, I am still a big believer in extended warranties on cars. There are just too many exceptions and repairs are just too expensive to take a chance on having to make payments and pay for repairs at the same time. Check out several extended warranty companies online, and read the contract to see what it actually covers, then decide. Don’t just buy the warranty the dealer is pushing for the same reason you don’t just finance it with the dealer without doing a little comparison shopping.