AAA:  Cost Of New Car Ownership Drops

Here is some what is sure to be welcome news for new vehicle car owners. The cost of owning a new vehicle is down this year. According to a new AAA Your Driving Costs analysis, this year’s analysis shows that the total cost of owning and operating a new vehicle is $11,577, or $964.78 per month, a $719 decline from 2024.

AAA attributes the decline to factors including lower depreciation, lower finance charges, reduced fuel prices, and a shift towards more affordable vehicle options. But before you rush off and buy new wheels based on this exciting news, AAA advises caution.

“It might be tempting to rush to the dealer for a new car when you notice a drop in ownership costs this year,” said Greg Brannon, AAA’s director of automotive research. “However, consumers should factor in all the expenses involved before making any commitments.”

The most significant cost of vehicle ownership is, of course, depreciation, which is the difference between a car’s purchase price and its resale value. It starts right when you drive off the lot.  This year, AAA says depreciation has decreased by a few hundred dollars, with vehicles in the YDC study losing an average of $4,334 in value per year compared to $4,680 annually in 2024.

AAA says other categories driving lower costs this year include:

• Finance Charges – Estimated finance costs have decreased to $1,131 in 2025, down 15 percent compared to $1,332 in 2024.  *Please note: Sticker price decrease is partially due to new vehicles in YDC. 
• Fuel Prices – The average fuel cost dropped to 13.00 cents per mile, a 12.8% decrease from last year, while regular grade gasoline for YDC vehicles averaged $3.151 per gallon, down from $3.539. Meanwhile, electricity prices for charging electric vehicles rose slightly to 16.7 cents per kilowatt hour, up from 15.9 cents in 2024.

The Right Vehicle – Your Budget 

AAA says choosing the vehicle that suits your needs is important, as it can lead to significant savings over time. It gives this comparison that highlights the importance of selecting a vehicle based on actual transportation needs:

• While a pickup truck is ideal for heavy-duty hauling and towing, it comes at a steep cost, averaging an additional $6,402 per year compared to a small sedan, which operates at just 55.87 cents per mile—43.3 percent less than a pickup.

Similarly, AAA says according to this year’s AAA EV survey, consumers are increasingly drawn to electric vehicles (EVs) for their gas savings and lower maintenance costs, with EVs having the second-lowest maintenance expenses among all vehicle categories. Hybrid options are also appealing, offering the lowest maintenance fees while sharing similar lower fuel cost benefits, even considering the national average electricity price of 16.7 cents per kilowatt-hour (kWh). Ultimately, whether opting for a pickup, a small sedan, or an EV, weighing these factors carefully to make a well-budgeted decision can lead to ownership savings.

Comparison of EV/ Hybrid Ownership Costs Vs Gas-Powered

Gas prices are the primary factor affecting the cost differences between electric vehicles (EVs) and gas vehicles this year. While EVs remain more expensive in “ownership costs” (depreciation, insurance, fees, and financing), they have lower “operating costs,” particularly in fuel and maintenance. Last year, EV fuel costs were about one-third of gas vehicle costs.

This year, however, gasoline prices are down significantly - while on the flip side, electricity prices are up slightly. AAA says that although EVs still offer fuel savings—less than half of gas vehicle costs—it's not enough of a savings to sufficiently offset their higher ownership costs. The end result: EVs are now more expensive overall across all vehicle categories in the AAA study.

AAA says it continues to expand its Your Driving Cost analysis by comparing top-selling EV and Hybrid models in four popular vehicle categories – medium sedan, compact SUV, medium SUV, and pickup truck.  Researcher say over the years, automakers have expanded their lineups to include more appealing categories and popular models. Now, AAA says with this bonus analysis, consumers have a snapshot of ownership costs for select EV and Hybrid models compared to their gas-powered counterparts.

AAA's Car Buying Advice 

• Create a monthly or annual budget and factor in ownership and operating costs before purchase.
• Keep each transaction and negotiation separate from the other – the cost of the car, the finance rate, and the trade-in value.
• Obtain pre-approval from a financial institution (e.g., Bank, Credit Union, AAA, etc.) before discussing finance rates with the car dealer to ensure you get the best lending rate available to you.
• There are quite a few options (online and in-store) available to consumers when considering where to buy a used vehicle besides a dealership. Visit your local AAA, which may offer discounts for members.

Additional AAA Tools and Support:  

• Your Driving Costs calculator: Customizable digital tool that offers cost analyses for specific vehicles by category, new and used cars (up to five model years back).
• AAA Car Guide: Annual guide that ranks and rates vehicles with the latest automotive technology.
• AAA’s Car Buying Program: Comparisons for consumers to use while car shopping and buying.
• EV 101 (Digital Buyer’s Guide): Resource and educational guide for consumers to use while electric vehicle shopping and buying.
• Repair Cost Calculator: Repair costs breakdown for parts and labor, including AAA member discounts available when visiting AAA Approved Auto Repair facilities.