AAA has found, based on its latest research, that the average yearly cost to own and operate a new vehicle has increased to $10,728, or $894 per month.

This is the case while the sell prices on used vehicles have skyrocketed over the past couple of years and the average age of vehicles on the road has also increased.

The increase in ownership costs for new vehicles is more than $1,000 above last year. Gas prices are the most significant factor that drove up this year’s average, according to AAA.   

“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, in a statement. “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.” 

AAA evaluated nine categories of vehicles and 45 models to determine a new vehicle’s average annual operating and ownership costs, which included top-selling, mid-priced models. They’re compared across six categories — fuel, maintenance/repair/tire costs, insurance, license/registration/taxes, depreciation, and finance charges. The annual study assumes a five-year ownership period with the vehicle being driven 15,000 miles a year or a total of 75,000 miles. 

AAA shared additional information with Repairer Driven News that states the average ownership cost per mile for vehicles driven 10,000 miles a year is 76 cents and the cost decreases as more miles are driven. The cost per mile for 15,000 miles is 72 cents and 70 cents for 20,000 miles. AAA’s findings are also based on the average MSRP of a new vehicle costing $33,301.

AAA also found that small sedans are the cheapest to maintain overall at 54.56 cents per mile at 15,000 miles per year and the most expensive is a half ton pickup truck at 86.21 cents per mile.

Fuel costs were projected based on a weighted average of the first five months of 2022, which came to $3.99 a 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,” AAA said. “Because of the high variability of fuel costs, consumers are considering alternative ways to budget for the cost of vehicle ownership. One way they do this is by exploring electric vehicles as an option for their next car purchase.”

A recent AAA consumer survey found the main factor behind Americans’ desire to buy an electric vehicle is to save on fuel costs.   

The study found that EVs have the second lowest annual ownership costs behind small sedans. For example, an EV owner will spend about 4 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. For the year, that’s $600 versus $2,700 if both owner types drive 15,000 miles.   

EVs also have the lowest maintenance, repair, and tire costs, according to AAA’s research. “This is because gas-powered vehicles require additional maintenance such as oil changes, air filter replacements, and inspection of mechanical components not present in electric vehicles. Additionally, electric vehicles have the lowest fees due to federal and state rebates offered to buyers of new electric vehicles as a purchase incentive.”

AAA now offers the “Your Driving Costs” calculator for consumers, which uses the same methodology as the annual analysis of new car ownership and allows users to view cost analyses of a specific vehicle by category.  

Consumers can also use the AAA Car Guide to learn about the latest automotive technology and research vehicles that best suit their needs. AAA recommends consumers follow these steps before purchasing:  

• • “Start early: Due to limited inventory, consumers may have fewer choices regarding a specific vehicle model. They may have to wait for delivery or even pre-order the vehicle of their choice. 
  • “Obtain pre-approval from their financial institution (e.g., Bank, Credit Union, AAA, etc.) before discussing finance rates with the car dealer. By getting pre-approval, they will have a threshold of the best lending rate they’ll pay. Buyers can use their pre-approval to negotiate if the dealer offers a higher rate.  
  • “Create a budget and factor in the different elements of ownership before purchase – not just monthly payments. Other factors to consider when making the budget include insurance, gas, routine maintenance, etc. 
  • “Typically, three negotiations occur when purchasing a vehicle – the cost of the car, the finance rate and the trade-in value. Keep each transaction/negotiation separate from the other.”

IMAGES

Featured image credit: Rattankun Thongbun/iStock