The costs of owning a car continue far past the date of purchase. Based on American Automobile Association (AAA)’s latest study on Driving Costs, owning a car costs an average of $9,666 per year. The actual expenses can vary based on several factors, such as the type of car, insurance and maintenance. They all play a role in the cost of owning a car. By knowing and understanding these factors prior to purchasing a vehicle, you can better determine if owning a car fits your budget.

Average Annual Cost Per Vehicle Type

The average cost of car ownership per year starts with the type of vehicle you drive. The bigger the vehicle, the more expensive it will be to maintain and fill the gas tank.

  • Vehicle Category
    Annual Average Cost to Maintain*
  • Small Sedan

    Honda Civic, Hyundai Elantra,
    Mazda 3, Toyota Corolla


  • Medium Sedan

    Honda Accord, Toyota Camry,
    Mazda 6, Hyundai Sonata


  • Full-Size Sedan

    Audi A7, Nissan Maxima,
    Mercedes-Benz S-Class, Tesla
    Model S


  • Hybrid

    Hyundai Sonata Hybrid,
    Honda Accord Hybrid, Toyota
    Camry Hybrid, Honda Insight


  • Electric

    Chevrolet Bolt, Nissan Leaf,
    Lucid Air, Tesla Model S


  • Compact SUV (Crossover)

    Hyundai Tucson, Jeep
    Cherokee, Ford Escape,
    Toyota RAV4


  • Medium SUV

    Ford Edge, Honda Pilot,
    Toyota Highlander, Lexus
    RX 350


  • Pick-Up Truck

    Chevrolet Silverado, Ford
    Ranger, GMC Sierra, Nissan


  • Minivan

    Ford Flex, Honda Odyssey,
    Toyota Sienna, Kia Sedona


Note: Costs are calculated based on 15,000 miles driven annually

*Source: American Automobile Association. Prices as of July 2022.

Breakdown of Costs

The cost of owning a car doesn’t end at auto loan payments and gas. There are a myriad of other expenses involved, such as insurance, license and registration fees, maintenance and more. Accounting for expected and unexpected expenses is vital to determining your car budget.

  • Car Cost Item
  • Sale Price
    Amount paid for your car on the date of sale.
  • Gas Price
    Amount paid for fuel for every mile that you drive.
  • Annual Insurance
    A yearly premium is paid to an insurance company to protect you and your vehicle in the event of unexpected bodily or property damage, theft, and/or injury-related expenses such as medical fees. Auto insurance is a legal requirement in all states, excluding New Hampshire.
  • Finance
    The payments made towards repaying a car loan, if applicable.
  • Depreciation
    The difference between your new-vehicle purchase price and the current price of your vehicle after time has passed. The value of most cars depreciates on a year-to-year basis, which is something to consider if you eventually plan on selling or replacing your vehicle.
  • License, Registration and Taxes
    Mandatory for driving is registering your vehicle and ensuring that you have a license, which involves taxes and fees.
  • Vehicle Maintenance
    Maintenance fees, including the cost of routine maintenance and repairs.
A woman calculating the cost of owning a car.

How to Calculate Annual Cost of Car Ownership

While it can be tedious work to determine your overall ownership costs, calculating the cost of owning a car can help you manage your finances and keep personal debt to a minimum.

Take a look at how to calculate the different costs of car ownership.

The formula for how to calculate miles per gallon.

The formula for how to calculate cents per mile.

The cost of gas per mile can give you insight into how much you’re paying for gas. You can generate two outcomes: miles per gallon and cents per mile. This information can tell you how much to budget for gas when evaluating the cost of owning a car.

To calculate how many miles possible per gallon, take the total number of miles you’ve driven and divide that by the total number of gallons for a full tank.

To calculate the dollar amount, or cents per mile, simply divide the total cost of a full tank by the total number of miles driven.

Average Gas Costs for a 1-Year-Old Medium Sedan
  • Gallons for Full Tank
    Average Cost Per Gallon**
    Average Cost of Full Tank
    Odometer (Miles)
  • 17.6




  • 20




**Source: American Automobile Association Gas Prices. Average gas price as of July 6, 2022.

Example: Calculating for a Medium Sedan

  • Gas Cost
  • Total Gallons for Full Tank
    21 Gallons
  • Total Cost of Full Tank
    $100.38 (at $4.78 cost per gallon)
  • Total Miles Driven

Using the table above as an example, assume you drove 867 miles and it takes 21 gallons to fill your tank. Following the miles per gallon formula, you can drive about 41.3 miles per gallon.

An example of how to calculate miles per gallon.

However, if you want to calculate the dollar amount per mile or the cents per mile, take the cost of a full tank and divide that by the total miles driven. In this example, assume that it costs $100.38 to fill your tank. If you drive 867 miles, the cost per mile is 11.58 cents.

An example of how to calculate cents per mile.

Operating Costs

Your operating costs, otherwise known as variable costs, are only incurred if you drive the vehicle. Typically, this includes your gas, maintenance and costs of repair (if applicable). To determine your fuel costs, calculate your vehicle’s cents per mile.

Operating costs are just one aspect of owning and driving a vehicle. There are additional costs associated with the responsibility of owning a car.

Ownership Costs

The cost of car ownership involves other fees and requirements to own and operate a car. This includes auto insurance, registration and license fees, taxes and any charges associated with your auto loan. Depreciation, which is the loss of your vehicle’s value every year, is another consideration. It can impact the resale value of your car if and when you decide to sell it.

Average Ownership Costs for a Medium Sedan
  • Type of Expenses
    Average Cost
  • Comprehensive Annual Insurance


  • Licenses, Registration and Taxes


  • Depreciation (15,000 miles annually)


  • Finance Charge


  • Cost Per Year


  • Cost Per Day


Car Ownership Cost FAQs

The costs of car ownership can be confusing for first-time car buyers. Read the frequently asked questions below to get a better understanding.

Expert Insights

Owning a car for the first time can be intimidating, especially with all the fees involved. Learn how to manage it and how to make the right decision by reviewing insight from the experts.

  1. How much could the cost of owning a car increase in the next five years? Would first-time car buyers be able to afford owning a car?
  2. How can consumers with cars manage the costs of owning a vehicle?
Robert Walden
Robert Walden

Founder of Vehicle Freak

Mike Baldicana
Mike Baldicana

Web Content Specialist at Kostex Garage Repair

Craig Campbell
Craig Campbell

Founder & CEO at Auto Parts Guideline

Related Content

Managing the costs of owning a car is not always easy, especially considering how expenses include more than the price of the car and gas. Review other MoneyGeek resources below to inform your auto budgeting.

  • First-Time Car Buyer's Guide: Get the Right Car for the Right Price: Buying your first car is an exciting milestone, but weighing which kind of car to buy, when to buy and where to buy it is challenging. MoneyGeek can help you anticipate costs and determine how to make the best decision for you.
  • Ultimate Guide to Purchasing a Used Car: It's fun to visualize yourself in a new (or brand-new-to-you) car, but you don’t want to end up making the wrong decision. MoneyGeek can help you determine what to look for when buying a used car.
  • The Cheapest Car Insurance Companies & Quotes: Purchasing auto insurance is a must, but if you’re on a budget, you’ll want to opt for the lowest offer. Review MoneyGeek’s lineup of the most affordable auto insurance companies available.
  • Do You Need Auto Insurance Before Buying a Car?: Before you drive off the lot with your new car, you must purchase auto insurance if you don't already have it. Many people wait until signing on a car to get car insurance, but it's better to compare coverages well in advance.
  • Used Car Insurance: Everything You Need to Know: If you’re looking to find the most affordable insurance for a used car, review this guide from MoneyGeek. Find out how to buy used car insurance and how to get the lowest price.

About Nathan Paulus

Nathan Paulus headshot

Nathan Paulus is the director of content marketing at MoneyGeek. Nathan has been creating content for nearly 10 years and is particularly engaged in personal finance, investing, and property management. He holds a B.A. in English from the University of St. Thomas Houston.