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Annual cost of new car ownership exceeds $10,000

Annual cost of new car ownership exceeds $10,000

ORLANDO, FL. (Aug 11, 2022)) – AAAs for over 70 years Your driving costs has provided members, consumers and the media with information on the average cost of owning and using a new car. According to AAA’s latest research, the average annual cost of owning and operating a new vehicle will be $10,728 or $894 per month by 2022. A significant increase from 2021, when the average annual cost was $9,666 or $805.50 per month. Not surprisingly, fuel prices are the main factor pushing this year’s average annual price tag.

“Consumers are paying more attention when buying a new vehicle as everything is more expensive now,” said Greg Brannon, AAA’s director of automotive engineering. “With the recent rise in fuel prices, more and more people want to know the true cost of owning a car beyond their monthly payment.”

In its most recent analysis, AAA evaluated nine vehicle categories — comprising 45 models — to determine the average annual cost of ownership and operation of a new vehicle. AAA selects the best-selling, mid-priced models and compares them in six categories: fuel, maintenance/repair/tire costs, insurance, license/registration/taxes, depreciation and financing costs. The study assumes a five-year ownership period, with the vehicle driven 15,000 miles/yearly (or a total of 75,000 miles).

For this year’s study, 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. Gasoline prices have risen dramatically since early March and as a result, the cost of ownership of vehicles has risen accordingly since your driving cost review. Due to the high variability of fuel costs, consumers are considering alternative ways to budget the cost of owning a vehicle. One way they are doing this is by exploring electric vehicles as an option for their next car purchase. In fact, a recent AAA consumer research found that the main factor behind Americans’ desire to buy an electric vehicle is to save on fuel costs.

This year’s Your Driving Costs analysis shows that electric vehicles have the second lowest annual cost of ownership, after small sedans. In 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 refuel. Assuming both drive 15,000 miles a year, it would cost about $2,700 a year to fuel the gas vehicle and $600 a year to charge the electric vehicle. A difference of $2,100 per year.

In addition to fuel savings, electric vehicles have the lowest maintenance, repair and tire costs. This is because gas-powered vehicles require additional maintenance such as oil changes, air filter replacement, and inspection of mechanical components that are not present in electric vehicles. In addition, electric vehicles have the lowest costs due to federal and state discounts offered to buyers of new electric vehicles as an incentive to purchase.

New this year, AAA launched an online Your driving cost calculator to provide car buyers with a more interactive and personalized breakdown. This online tool uses the same methodology as the AAA’s annual analysis of new car ownership. It allows users to view comprehensive cost analysis of a specific vehicle by category to determine the cost of ownership that best fits their budget. Data is available for new and used vehicles (five model years back) and consumers can adjust the results based on location and other personal driving habits.

Consumers can also use the AAA car guide to learn about the latest automotive technology and research vehicles that best suit their needs. AAA urges car buyers to know all costs associated with ownership in order to negotiate the best deal for their budget and recommends consumers follow these steps before purchasing:

  • Start early! Limited stock may leave consumers with fewer choices regarding a specific vehicle model. They may have to wait for delivery or even pre-order the vehicle of their choice.
  • Get prior approval from their financial institution (e.g., Bank, Credit Union, AAA, etc.) before discussing financing rates with the car dealer. By getting pre-approval, they have a threshold of the best loan rate they will pay. Buyers can use their pre-approval to negotiate if the dealer offers a higher rate.
  • Budget and consider the various elements of ownership before purchase – not just monthly payments. Other factors to consider when making the budget are insurance, gas, routine maintenance, etc.
  • Typically, three negotiations take place when purchasing a vehicle: the cost of the car, the financing rate, and the trade-in value. Keep each transaction/negotiation separate from the others.

Calculate the annual driving costs via the new AAA Your driving cost calculator. Visit AAA Newsroom and discover several resources consumers can use while shopping, including the AAA car guide and AAA’s Car Purchase Program.

Methodology
AAA uses a proprietary method to calculate the cost of owning and operating a new car in the United States. Data is collected from a variety of sources, including Vincentric LLC, and includes standardized criteria to estimate the cost of using a new vehicle for personal transportation over five years and 75,000 miles of ownership. Using standardized criteria ensures that AAA estimates:
consistent when comparing the driving costs of different vehicle types. Actual driving costs will depend on driving habits, location, operating conditions and other factors.

About AAA:

Started in 1902 by car enthusiasts who wanted to chart a path for better roads in America and advocate for safe mobility, AAA has transformed into one of North America’s largest membership organizations. Today, AAA provides roadside assistance, travel, discounts, financial and insurance services to improve the lives of 63 million members in North America, including more than 56 million in the United States. To learn more about all that AAA has to offer or to become a member, visit AAA.com.

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