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Car ownership costs $12,182 per year or $1,015 per month on average, according to a 2023 AAA report. That's up 13% from 2022 when it cost $10,728 annually ($894 per month). Higher fuel, insurance and maintenance costs are driving the increase.
Your actual costs depend on what you drive and how much you use it. Factor in all these expenses before buying a car to make sure it fits your budget.
Cost of Car Ownership Fast Facts
The numbers don't lie — owning a car can get expensive.
Owning a car costs an average of $12,182 per year or $1,015 monthly.
The cost of owning and maintaining increased 13% from 2022 to 2023.
The costs of owning a car include the purchase price, gas prices, annual insurance, finance charges, depreciation, license and registration fees and vehicle maintenance.
The average total cost per mile rose to 81 cents in 2023 from 72 cents in 2022.
Bigger cars cost more to own. SUVs and trucks burn more gas and need pricier maintenance than compact cars or electric vehicles.
According to AAA, half-ton pickups have the highest annual maintenance cost at $15,858, whereas small sedans are the least expensive at $8,939 per year.
Vehicle Category | Annual Average Cost to Maintain |
|---|---|
Small Sedan | $8,939 |
Medium Sedan | $11,048 |
Subcompact SUV | $9,718 |
Compact SUV | $10,066 |
Medium SUV | $11,971 |
Mid-Size Pickup | $12,258 |
Half-Ton Pickup | $15,858 |
Hybrid | $9,650 |
Electric | $10,112 |
Note: Costs are calculated based on 15,000 miles driven annually. Source: American Automobile Association.
Your monthly car payment and gas aren't your only expenses. Insurance, registration fees, maintenance and repairs all add up fast.
Here's what car ownership actually costs and what each expense covers:
Category | Cost | Description |
|---|---|---|
Depreciation | $4,538 loss in value/year | How much your car loses in value each year. This is based on the difference between what you paid and what it's worth after five years and 75,000 miles. |
Finance | $1,253/year | What you'll pay annually on a five-year car loan with 10% down at average interest rates. Includes taxes and first-year license fees. |
Fuel | 15.93¢/mile | What you'll spend on gas or electricity per mile driven. Based on regular gas at $3.99/gallon for gas cars or 15.8 cents per kilowatt-hour for electric vehicles. |
Insurance | $1,765/year | Annual cost for full coverage if you're under 65, have over six years of driving experience, no accidents and live in a suburban or urban area. |
License, Registration & Taxes | $762/year | All the government fees you pay when buying a car, plus annual costs to keep it licensed and registered. |
Maintenance, Repair & Tires | 9.83¢/mile | Routine maintenance, wear-and-tear repairs and one set of replacement tires over five years. Includes extended warranty costs. |
Source: American Automobile Association
To calculate the total cost of owning a car, add up your operating costs (gas, maintenance, repairs) and ownership costs (insurance, loan payments, registration, depreciation). Track your actual expenses for a more accurate picture than using national averages.
Operating costs are what you spend only when you drive: gas, maintenance and repairs. These costs vary based on how much you drive.
Calculate your gas cost per mile to budget for fuel expenses. You'll need two numbers: miles per gallon and cost per mile.
To find your miles per gallon, divide the total miles you've driven by the gallons needed for a full tank:
To calculate the dollar amount or cents per mile, divide the total cost of a full tank by the total number of miles driven.
Gallons for Full Tank | Average Cost per Gallon** | Average Cost of Full Tank | Odometer (Miles) |
|---|---|---|---|
17.6 | $3.45 | $60.79 | 13,867 |
20 | $3.45 | $69.08 | 13,470 |
**Average gas price as of August 10, 2024. Source: American Automobile Association Gas Prices.
Gas Cost | Amount |
|---|---|
Total Gallons for Full Tank | 21 Gallons |
Total Cost of Full Tank | $79.80 (at $3.80 cost per gallon) |
Total Miles Driven | 867 |
Using the table above as an example, assume you drove 397 miles, and it takes 21 gallons to fill your tank. Following the miles per gallon formula, you can drive about 18 miles per gallon.
To find your cost per mile, divide what you pay for a full tank by how many miles you can drive on that tank. If it costs $79.80 to fill up and you drive 397 miles, you're paying 20 cents per mile for gas.
Ownership costs are the expenses you pay whether you drive your car or not: insurance, registration fees, taxes, loan payments and depreciation. Depreciation is how much value your car loses each year, which matters when you sell or trade it in.
Here's what the average ownership costs look like for a medium sedan:
Type of Expenses | Average Cost |
|---|---|
Comprehensive Annual Insurance | $1,922 |
Licenses, Registration and Taxes | $668 |
Depreciation (15,000 Miles Annually) | $3,922 |
Finance Charge | $1,030 |
Cost per Year | $7,542 |
Cost per Day | $21 |
Source: American Automobile Association
Car ownership costs dropped steadily from 2012 to 2017, hitting their lowest point at $8,468 in 2017. Then everything changed: costs have been climbing since 2018 and jumped 13% in 2023 to $12,182.
Here's how the yearly changes broke down:
Gas prices are the main culprit behind the recent spike. The sharp increase in 2022 shows just how much higher fuel costs hit your wallet.
Per-mile costs followed the same pattern, dropping from 2012 to 2017 when they hit 56 cents per mile. Since 2018, they've been climbing and reached 72 cents per mile in 2022.
Again, gas prices are driving the increase. The 2022 surge shows how record-high gas prices pushed up the cost of every mile you drive.
There are a number of ways to manage the costs of owning a car. One way is to consider the total cost of ownership when making your purchase.
This includes things like insurance premiums, maintenance and repair expenses, fuel costs, and any other associated expenses.
Another way to manage the costs of owning a car is to compare prices from different dealerships, as this can help you find the best deals on things like maintenance and repairs.
Ask a question, it’s free
Ask an expertCar ownership costs more than just your monthly payment. Here are answers to common questions about what you'll actually spend:
Car ownership costs an average of $1,015 per month or $12,182 per year. Your actual costs depend on what you drive, how much you drive and where you live.
You'll pay for repairs, maintenance, registration fees, taxes, auto insurance and gas on an ongoing basis. These add up to most of your annual car costs.
To calculate the cost of gas per mile or cents per mile, divide what you pay for a full tank by how many miles you can drive on it. If it costs $150 to fill up and you drive 1,000 miles, you're paying $0.15 per mile for gas.
The costs of electric car ownership includes electricity, maintenance, insurance and depreciation. While electricity usually costs less than gas, your total expenses vary depending on the car's make and model.
Managing car ownership costs is tricky because expenses go way beyond the purchase price and gas. These MoneyGeek resources will help you better handle the total cost and make smarter vehicle decisions:
About Nathan Paulus
Nathan Paulus is the Head of Content Marketing at MoneyGeek, with nearly 10 years of experience researching and creating content related to personal finance and financial literacy.
Paulus has a bachelor's degree in English from the University of St. Thomas, Houston. He enjoys helping people from all walks of life build stronger financial foundations.
