Summary. This document contains the purchase and ownership information for a 1994 Volvo 850 Turbo purchased on 2 January 2008 from Whitdog Auto in Iowa City. The purpose of this document is to maintain a chronicle of an study in automobile transportation as contrasted and compared to public transportation, walking, or bicycle commuting. Volvos are considered to be one of the safest and most reliable vehicles available with an average cost of ownership. The cost of ownership (cost per mile) for this Volvo proved to be more costly than anticipated due to unanticipated repairs needed and low monthly mileage usage. This resulted in the cost of operation being about $1 to $2 per mile. For this reason the car was sold back to the dealership on 4 May 2008.
Purchase Price and Value. The car was purchased for $4,900 and at the time of purchase had a book value ranging from $2,900 to $6,050 according to Edmunds, Kelley Blue Book, NADA, and Progressive Insurance. Rather than paying cash, the car was purchased using a loan over 2 years with monthly payments of about $220. Upon later inspection, it was learned that, at the time of purchase the vehicle had over $2,000 in malfunctioning components such as: some dash board lights not working, parking break not working, automatic window on driver’s side not working, automatic driver’s side mirror sticking, headlight wipers not working, seat warmers not working, and radio buttons not working (making the radio unusable if it becomes locked). This list of “optional” repairs was compiled by the Whitedog repair shop. These and other repairs will probably be performed on a scheduled budget of about $200 per month over a period of one to two years. Although the car was sold with a 3000 mile warranty covering 50% of parts and labor, the warranty is only good for repairs to the powertrain (which is very unlikely to ever break down).
Fuel Efficiency. The in-town fuel efficiency in the colder winter temperatures has been between 9 and 12 miles per gallon. The fuel efficiency is calculated by a very accurate on-board computer and displayed. The miles per gallon seems to be equal to the average speed, which is also calculated by computer. For speeds of 25 miles per hour or higher, the fuel efficiency seems to be between 25 and 30 miles per gallon (the maximum efficiency). The fuel efficiency at lower speeds seems to be highest when using the Sport setting rather than the Economy setting. These settings determine the RPM of the engine when the transmission will shift into the next gear. Using the Sport setting seems to allow the car to operate at higher RPMs with the benefit of the Turbo system which seems to produce more horsepower for an equal amount of fuel used.
- Fuel Efficiency Action Point. If a vehicle is to be used for high usage and high mileage, fuel efficiency becomes a greater issue. For a commuter, on-the-road sales person, or busy consultant, driving an average of two hours per day of highway miles (3,000 miles per month), and fuel costs at about 15 cents per mile ($3 per gallon and 20 MPG), the monthly fuel cost would be about $450. A vehicle that gets about 40 miles per gallon could save $225 per month — enough savings to cover the monthly payments on a new, more fuel efficient vehicle. For about $3,500, a used Geo Metro, would provide a fuel efficiency of about 35 to 40 MPG. Note: A brand new 1993 Geo Metro 4-door hatch back tested for 200,000 miles by Resources for Life.com was found to have an extremely low cost of ownership and produced excellent fuel efficiency.
Insurance. The car is insured through Progressive at a cost of about $88 per month ($1056 per year). The insurance policy has a $100 deductible and includes the coverage outlined below, with a price breakdown showing the cost of each area of coverage. For greater savings, a $500 deductible could be selected. If the vehicle were owned (rather than being purchased from the bank), the insurance policy would not need to cover damages to the vehicle itself. Prices below are for a 6-month period.
- BODILY INJURY & PROPERTY DAMAGE LIABILITY – Cost $218.00
- BI $100,000 EACH PERSON – $300,000 EACH ACCIDENT
- PROPERTY DAMAGE LIABILITY – $100,000 EACH ACCIDENT
- MEDICAL PAYMENTS $10,000 EACH PERSON – Cost $17.00
- COMPREHENSIVE ACV LESS $100 DEDUCTIBLE – Cost $81.00
- COLLISION ACV LESS $100 DEDUCTIBLE – Cost $154.00
- RENTAL REIMBURSEMENT $30/DAY FOR MAX OF 30 DAYS – Cost $23.00
- UNINSURED MOTORIST – Cost $15.00
- $100,000 EACH PERSON – $300,000 EACH ACCIDENT
- UNDERINSURED MOTORIST – Cost $6.00
- $100,000 EACH PERSON – $300,000 EACH ACCIDENT
- ROADSIDE ASSISTANCE – Cost $7.00
Parking and Storage. The car is stored indoors at a cost of $35 per month. Parking during the day is either in public parking ramps or on-street parking.
Operating Cost. When used on a regular basis, the monthly operating cost of the car is about $700 to $800. This includes payments ($220), insurance ($88), gasoline ($100), routine maintenance ($30), parking ($140), AAA membership ($7), and monthly repairs ($100 to $200).
- Operating Cost Action Point. If at all possible, it would be best to use a bicycle as the primary mode of transportation and rely only on the car for weekly shopping and errands. This will reduce the cost of fuel, parking, and maintenance. If the car is driven about 300 miles per month (10 miles per day) the cost per mile will be about $1 to $2 per mile.
Repair Journal and Maintenance History. Here is a list of repairs in the order they were performed with the most recent listed at the top.
- Fuel Efficiency Update. By switching the car into economy mode, and going very light on the gas peddle, it was possible to achieve a mostly in-town driving efficiency of about 20 miles per gallon.
- Body Work Completed. This morning I picked up the car. It looked great. Although the damage was only on a portion of the front right fender, the entire car was washed, waxed, and detailed.
- Body Work – Fender Repair. I took the car to Premiere Automotive Collision Repair and Restoration yesterday to have the passenger-side front fender repaired (damages mentioned in a prior entry). The repair cost of $965.64 is covered under the insurance policy, less a $100 deductible payment. The insurance through Progressive also covers the cost of a rental car, which was scheduled by the insurance company for delivery by Enterprise to be available on location when dropping off my car for repairs. Progressive and Enterprise have a satellite office at Premiere Automotive to facilitate the repair process. Although no parts are needed for the repairs, and the fender simply needs to be pulled out, the repair costs are high due to the labor involved in removing all molding around the doors and windows. Progressive voluntarily chooses to pay for a higher cost of repairs to ensure that the repairs are done properly in a way that ensures no future flaking or pealing. (20080313th0938)
- Front Light Wipers. The front light wipers would cost about $400 to repair. So, it is most practical to simply unplug the wiper motors. This service was provided as a courtesy for free by Whitedog. (20080303mo)
- Passenger-side Door Stuck – Damaged Fender. There appeared to be a small dent in the front passenger-side fender near the door hinge. This has caused the passenger-side door to bind when opening. A claim has been filed with Progressive to have it repaired. There is a two-week waiting list for body work to be done at Premier Automotive, the local preferred auto collision center. The claim was reported on 20080226tu. (20080221th)
- Radio Locked and Battery Drained. The car would not start due to a low battery caused by an interior light being left on. Although the battery still had cranking amps, it apparently was low enough to cause the radio to become locked. Only after several days and having warmer temperatures did the radio buttons work well enough to enter the unlock code. The unlock code is usually provided on a card with the owner’s manual. However, some cars may have a different radio or owner’s manual. So, it may be necessary to contact the dealer for the unlock code. (20080211mo)
- Car Not Starting. The car was unable to start for about a week. The battery still had sufficient power to turnover the engine, but it just wouldn’t start. This was presumably because of cold temperatures producing frozen water in the fuel line. After the temperature went above freezing, ISO Heat and 3M Fuel Injector Treatment were added to the fuel tank and allowed to work for several days. Eventually the car started again and has run fine since then. (20080126sa)
- Front Right Tire Low. Immediately upon driving the car off the lot, it was apparent that the front right tire was low on air. It turns out that it had about 15 pounds of pressure in it. The loss of air later proved to be an ongoing issue for the front right tire only.
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