Updated: May 22, 2026
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Owning a typical new car costs about $11,577 a year, or $965 a month, based on the latest full-year data. In real terms, costs are about 8.2% lower than a year earlier and 10% below the 2023 peak.
Adjusted to today's dollars, drivers pay roughly 2.7% less than in 2020, despite nominal costs running more than 20% higher than before the pandemic. MoneyGeek's car ownership statistics analysis tracks ownership rates by metro and region.
Nominal cost is the dollar amount actually paid, the figure that appears on bills and bank statements. Real cost adjusts that figure for inflation to reflect current purchasing power.
The average cost of owning a car climbed from $9,561 in 2020 to about $11,577 today, a roughly 21% nominal increase. The 2020 figure equals roughly $11,894 in today's dollars. Current costs are about 2.7% lower in real terms.
MoneyGeek's average price of a new car breakdown tracks how sticker prices and income moved over the same period. The analysis draws on recent Your Driving Costs reports and Bureau of Labor Statistics inflation data covering the past five years.
Adjusted for inflation, average car ownership costs peaked in 2023 and fell about 10% by 2025, even though nominal costs are more than 20% higher than in 2020.
The 5.9% nominal decline in total ownership costs understates the real improvement. With inflation at about 2.7% as car costs fell, drivers gained roughly 8.2% in real purchasing power.
Four categories drove most of the decline:
About $4,334 a year, 37% of total, the drop in value between purchase price and trade-in value after five years and 75,000 miles.
About $1,694 a year, 15% of total, full-coverage auto insurance, which varies widely by state and driver profile.
About $1,950 a year, 17% of total, based on 13 cents per mile and 15,000 annual miles.
About $1,656 a year, 14% of total, including routine maintenance, repairs and one tire replacement set.
About $1,131 a year, 10% of total, assuming a five-year loan with 15% down at average interest rates.
About $813 a year, 7% of the total, including sales tax, annual registration and licensing fees.
*These averages assume 15,000 miles of driving a year in a new vehicle.
Depreciation, insurance and fuel account for 69% of the $11,577 annual total. Maintenance, financing and fees cover the remaining 31%.
Depreciation | $4,334 | 37% |
Insurance | $1,694 | 15% |
Fuel | $1,950 | 17% |
Maintenance and repairs | $1,656 | 14% |
Finance charges | $1,131 | 10% |
Registration, license, tax | $813 | 7% |
Total | $11,577 | 100% |
Car ownership costs average about $965 a month. This figure assumes 15,000 miles a year and a financed new vehicle. Monthly figures are rounded and may not multiply exactly to annual totals. Costs vary by vehicle type: small sedans average about $698 a month, while half-ton pickups average about $1,232 a month.
Depreciation | $361 | $4,334 | 37% |
Insurance | $141 | $1,694 | 15% |
Fuel | $163 | $1,950 | 17% |
Maintenance | $138 | $1,656 | 14% |
Finance | $94 | $1,131 | 10% |
Registration, license, tax | $68 | $813 | 7% |
Total | $965 | $11,577 | 100% |
Measured in today's dollars, every major cost category is lower than in 2020, some modestly, others by nearly a third.
How each category has changed since 2020, in real terms:
Vehicle choice has the single largest impact on total ownership costs. At $6,400, the annual gap between the cheapest and most expensive categories exceeds what many U.S. households spend on groceries.
Half-ton pickup trucks cost about $6,400 more a year than small sedans, or roughly $533 more a month. Over 12 years, that difference totals around $76,800.
Small sedans cost about $8,381 a year, the most economical option. The Honda Civic, Toyota Corolla and Mazda3 combine low ownership costs with strong reliability and resale value.
MoneyGeek's best car insurance companies guide shows how insurance costs vary by vehicle type.
Small sedan | 55.87¢ | $8,381 | $698 | baseline |
Hybrid | 63.94¢ | $9,591 | $799 | +$1,210 |
Compact SUV | 68.53¢ | $10,280 | $857 | +$1,899 |
Electric vehicle | 71.21¢ | $10,682 | $890 | +$2,301 |
Medium SUV | 83.89¢ | $12,584 | $1,049 | +$4,203 |
Half-ton pickup | 98.54¢ | $14,781 | $1,232 | +$6,400 |
Electric vehicles recorded the largest cost improvement of any category. After peaking at 84.69 cents per mile, average EV ownership costs fell 16% to about 71.21 cents per mile.
Four trends drove the decline:
At about $10,682 a year, EVs cost roughly $2,301 more than small sedans and $402 more than compact SUVs, but about $1,899 less than medium SUVs. Drivers who charge at home, cover at least 15,000 miles a year and hold the vehicle for at least five years can reach cost parity with comparable gas SUVs within three to five years.
How ownership costs compare to household income determines affordability as much as the raw dollar figures.
Car ownership consumed about 15.1% of median household income at the 2023 peak. The decline to about 13.8% put roughly 1.3 percentage points (about $1,088 a year) back in the median household budget.
MoneyGeek uses the latest available Census income data, covering 2023 to 2024, to approximate current income because official 2025 figures aren't yet published.
2020 | $84,016 | $11,894 | 1.70 | 14.2% |
2021 | $84,091 | $11,483 | 1.64 | 13.7% |
2022 | $82,038 | $11,801 | 1.73 | 14.4% |
2023 | $85,125 | $12,871 | 1.81 | 15.1% |
2024 | $84,859 | $12,617 | 1.78 | 14.9% |
2025 | $83,730 (estimated) | $11,577 (nominal) | 1.66 | 13.8% |
Many personal finance experts recommend the 20/4/10 rule: 20% down payment, loan term of four years or less, and total vehicle expenses (payment plus insurance plus fuel) under 10% of gross monthly income.
For a median-income household at $83,730:
That $1,053 runs about 51% above the recommended target for median earners.
The rule works better for households earning around $120,000 or more. Median earners can reduce costs by buying three- to five-year-old vehicles, choosing smaller models such as a compact SUV over a full-size truck, or making larger down payments.
Inflation-adjusted costs separate affordability trends from nominal price movements.
2020 | $9,561 | $11,894 | baseline | baseline | Pandemic suppressed driving and demand. |
2021 | $9,666 | $11,483 | +1.1% | −3.5% | Supply chains were strained, but real costs fell. |
2022 | $10,728 | $11,801 | +12.2% | +2.8% | Inflation surged and real ownership costs rose. |
2023 | $12,182 | $12,871 | +27.4% | +9.0% | Real costs spiked and created an affordability problem. |
2024 | $12,297 | $12,617 | +0.9% | −1.9% | Nominal costs reached a high point, but real costs began to ease. |
2025 | $11,577 | $11,577 | −5.9% | −8.2% | Relief in both real and nominal terms. |
Mike Baldicana, Web Content Specialist at Kostex Garage Repair
Calculate total ownership costs before signing. The monthly payment is just one line item: insurance, maintenance and fuel add thousands a year.
Dealership service departments aren't always the best value for routine maintenance. Independent mechanics often charge less for oil changes and standard repairs.
Falling real costs and moderating inflation have eased the cost burden for car buyers in 2026.
Owning a typical new car costs about $965 a month, or $11,577 a year, based on the latest data. That figure includes depreciation, insurance, fuel, maintenance, registration and finance charges. Small sedans average about $698 a month. Half-ton pickups average about $1,232 a month.
Nominal costs rose about 21%, from $9,561 in 2020 to $11,577 in the latest full year. Adjusted for inflation, real costs declined about 2.7%. The 2020 figure equals roughly $11,894 in current purchasing power.
Three factors drove the decline: gas prices fell about 21%, depreciation eased as new car prices stabilized, and finance charges dropped by about $201. Together, they cut nominal costs by 5.9% and real costs by about 8.2%, the largest real improvement since 2020.
Depreciation is the largest cost at about $4,334 a year, roughly 37% of the total. Insurance often creates more budget stress because it requires a monthly cash outlay, while depreciation stays invisible until the vehicle is sold or traded in. Insurance costs also vary by state, vehicle and driver profile.
Electric vehicles cost about 71.21 cents per mile, equal to about $10,682 a year at 15,000 miles. That's roughly $2,301 more than small sedans and $402 more than compact SUVs, but about $1,899 less than medium SUVs. EVs carry the lowest maintenance and energy costs. Federal tax credits bring many models to cost parity with comparable gas vehicles within three to five years.
About Myryah Irby
Myryah Irby is a writer and data journalist at MoneyGeek. Her work spans original data studies and how-to guides covering auto, home and health insurance, consumer costs, and transportation safety.
Research and Analysis
Since joining MoneyGeek in late 2025, Irby has produced data studies on insurance costs, consumer spending and transportation risk. Her published work includes a 50-state analysis of winter driving danger using fatality and weather severity data; research tracking the relationship between rhodium commodity prices and catalytic converter theft rates, including state-level theft trends and what those rates mean for insurance costs; a state-by-state comparison of winter home heating costs; and an analysis of the full cost of having a baby in America: hospital bills, insurance and out-of-pocket expenses.
Career
Irby has more than 20 years of editorial and writing experience. Since 2005, she has run Irby x Irby, her own editorial and copywriting practice, with clients including The New York Times, The San Francisco Chronicle, OpenAI and the National Park Service. From 2019 to 2023, she served as Senior Managing Editor and then Copywriting Manager at Callisto Media, a nonfiction publisher acquired by Penguin Random House in May 2023, where she led a team of writers and graphic designers.
Before that, she spent nearly 11 years at QuinStreet, a performance marketing company that runs content and comparison sites in insurance and personal finance. She rose from Managing Editor to Senior Managing Editor between 2010 and 2016. Earlier in her career, she edited at Collabrys for nearly four years and tutored doctoral candidates on dissertation writing at the University of San Francisco.
