You might need to start saving more for your annual car costs. The average annual cost of vehicle ownership is going up yet again - now topping the $10K mark at $10,728 a year, or $894 a month. That's a $1,062 increase from 2021, when the average yearly cost was $9,666 or $805.50 per mont The numbers come from AAA's annual Your Driving Costs analysis that determines the average annual costs of owning and operating a new automobile which includes various factors like insurance, gas and maintenance. AAA says fuel prices are the most significant factor pushing this year’s average annual price tag.
“Consumers are paying more attention when purchasing a new vehicle since everything is more expensive right now,” said Greg Brannon, AAA’s director of automotive engineering. “With the recent increase in fuel prices, more and more people want to know the true costs of owning a car beyond their monthly payment.”
In this year's analysis AAA says it evaluated nine categories of vehicles - consisting of 45 models – to determine a new vehicle’s average annual operating and ownership costs. AAA selects top-selling, mid-priced models and compares them across six categories:
- maintenance/repair/tire costs
- finance charges
The study assumes a five-year ownership period, with the vehicle being driven 15,000 miles/annually (or a total of 75,000 miles).
The biggest cost of ownership is depreciation, followed by insurance and financing.
For this year’s study, AAA says fuel costs were projected based on a weighted average of the first five months of 2022. During that time, fuel prices averaged 17.99 cents per mile or $3.999 per gallon. Gas prices have seen a dramatic climb since early March, and, as a result, the cost of vehicle ownership has increased accordingly since the Your Driving Costs evaluation was completed. Because of the high variability of fuel costs, consumers are considering alternative ways to budget for the cost of vehicle ownership, like buying an electric vehicle. AAA says its recent consumer survey found that saving on fuel costs was the main factor behind Americans’ desire to buy an EV.
Lowest Cost of Ownership
When it comes to the lowest ownership costs, small sedans top this year's list followed by EVs. For comparison, an electric vehicle owner will spend about 4.0 cents per mile to charge their vehicle at home, while the owner of a gas-powered vehicle will spend an average of 18.4 cents per mile to gas up. Assuming both drive 15,000 miles/year, it would cost approximately $2,700/year to fuel the gas-powered vehicle and $600/year to charge the electric vehicle. A difference of $2,100 annually.
AAA says EV's don't just save money on fuel costs, they also have the lowest maintenance, repair, and tire costs. They don't need the oil changes, air filter replacements, and inspection of mechanical components that gas-powered vehicles do. Additionally, AAA says electric vehicles have the lowest fees due to federal and state rebates offered to new EV buyers.
Calculate Your Driving Costs
If you want some help budgeting for a new car, check out AAA's new Your Driving Costs calculator. AAA says the online tool employs the same methodology as AAA’s annual analysis of new car ownership. You can view comprehensive cost analyses of a specific vehicle by category to determine ownership costs. Data is available for new and up to five year old used vehicles. The tool customizes results based on location and other personal driving tendencies.
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