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Owning a typical new car costs about $11,577 per year, or $965 per 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. For broader trends on vehicle ownership rates by metro and region, see MoneyGeek's car ownership statistics analysis.
Nominal cost is the dollar amount actually paid — what 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. Converted to today's dollars, the 2020 figure equals roughly $11,894, making current costs 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.
When you adjust for inflation, average car ownership costs peaked in 2023 and fell about 10% by 2025, even though nominal costs remain more than 20% higher than in 2020.
The headline 5.9% decline in nominal ownership costs understates the actual improvement. Inflation slowed to about 2.7% as car costs fell, giving drivers an 8.2% gain in real purchasing power.
Four categories drove most of the decline:
Six categories account for total car ownership costs.
About $4,334 per 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 per year, 15% of total, full-coverage auto insurance, which varies widely by state and driver profile.
About $1,950 per year, 17% of total, based on 13 cents per mile and 15,000 annual miles.
About $1,656 per year, 14% of total, including routine maintenance, repairs and one tire replacement set.
About $1,131 per year, 10% of total, assuming a five-year loan with 15% down at average interest rates.
About $813 per year, 7% of the total, including sales tax, annual registration and licensing fees.
*These averages assume 15,000 miles of driving per 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 per month. This figure assumes 15,000 miles per year and a financed new vehicle. Monthly figures are rounded and may not multiply exactly to annual totals. Costs vary widely by vehicle type: small sedans average about $698 per month, while half-ton pickups average about $1,232 per 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 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 per year than small sedans, or roughly $533 more per month. Over 12 years, that difference totals around $76,800.
Small sedans at about $8,381 per year remain the most economical option. The Honda Civic, Toyota Corolla and Mazda3 combine low ownership costs with strong reliability and resale value.
Pair these figures with MoneyGeek's best car insurance companies guide to see how insurance quotes shift between vehicle types.
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 per 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 annually and hold the vehicle for at least five years can reach cost parity with comparable gas SUVs within three to five years.
Affordability depends on how ownership costs compare to household income, not just the dollar totals.
Car ownership consumed about 15.1% of median household income at the 2023 peak. The decline to about 13.8% represents roughly 1.3 percentage points (about $1,088 per year) returned to 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 close the gap by buying three- to five-year-old used vehicles, choosing smaller vehicles, such as a compact SUV instead of a full-size truck, or making larger down payments.
Inflation-adjusted costs show when ownership actually became more or less affordable, not just when prices moved.
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 annually.
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 improve the calculus for 2026 car decisions.
The figures below address the most common questions about total annual ownership costs.
Owning a typical new car costs about $965 per month, or $11,577 per year, based on the latest data. That figure includes depreciation, insurance, fuel, maintenance, registration and finance charges. Small sedans average about $698 per month; half-ton pickups average about $1,232 per 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 per year, roughly 37% of the total. Insurance often creates more budget stress because it requires cash every month, while depreciation remains invisible until you sell or trade in the vehicle. Insurance costs also vary widely by state, vehicle and driver profile.
Electric vehicles cost about 71.21 cents per mile, equal to about $10,682 per 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 with a master's degree in creative writing from the University of San Francisco. She analyzes insurance, housing and personal finance data for readers making major financial decisions. Her writing and interviews have appeared in The New York Times and The San Francisco Chronicle.
Irby has managed home improvement and insurance website portfolios for more than a decade. She breaks down complex insurance and finance topics into clear, actionable guidance.
