Annual Cost of New Car Ownership Crosses $10K Mark

For over 70 years, AAA’s Your Driving Costs has provided members, consumers and the media with information on the average costs of owning and operating a new automobile. According to the latest research from AAA, the average yearly cost to own and operate a new vehicle in 2022 is $10,728, or $894/month—a considerable increase from 2021, when the average yearly cost was $9,666, or $805.50/month. Not surprisingly, fuel prices are the most significant factor pushing this year’s average annual price tag.

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

In the most recent analysis, AAA evaluated nine categories of vehicles—consisting of 45 models—to determine a new vehicle’s average annual operating and ownership costs. AAA selects top-selling, mid-priced models and compares them across six categories: fuel, maintenance/repair/tire costs, insurance, license/registration/taxes, depreciation, and finance charges. The study assumes a five-year ownership period, with the vehicle being driven 15,000 miles/annually (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¢/mile, or $3.99/gallon. Because of the high variability of fuel costs, consumers are considering alternative ways to budget for the cost of vehicle ownership.

One way they do this is by exploring electric vehicles (EVs) as an option for their next car purchase. In fact, a recent AAA consumer survey found the main factor behind Americans’ desire to buy an EV is to save on fuel costs. 

This year’s Your Driving Costs analysis reveals that EVs have the second lowest annual ownership costs behind small sedans. For comparison, an EV owner will spend about 4¢/mile to charge their vehicle at home, while the owner of a gas-powered vehicle will spend an average of 18.4¢/mile to gas up. Assuming both drive 15,000 miles/year, it would cost approximately $2,700/year to fuel the gas-powered vehicle and $600/year to charge the EV—a difference of $2,100 annually. 

Beyond fuel savings, EVs have the lowest maintenance, repair and tire costs. This is because gas-powered vehicles require additional maintenance, such as oil changes, air filter replacements, and inspection of mechanical components not present in EVs.

New this year, AAA launched an online Your Driving Costs calculator (AAA.com/AutoRepair/DrivingCosts) to provide a more interactive and personalized breakdown for car shoppers. This online tool employs the same methodology as AAA’s annual analysis of new car ownership. It allows users to view comprehensive cost analyses of a specific vehicle by category to determine ownership costs that best align with their budget.

Consumers can also use the AAA Car Guide (AAA.com/CarGuide) to learn about the latest automotive technology and research vehicles that best suit their needs. AAA urges carbuyers to know all the expenses associated with ownership to negotiate the best deal for their budget and recommends consumers follow the following steps before purchasing:  

Start early! Due to limited inventory, consumers may have fewer choices regarding a specific vehicle model. They may have to wait for delivery or even preorder the vehicle of their choice. 

Obtain preapproval from their financial institution (e.g., Bank, Credit Union, AAA, etc.) before discussing finance rates with the car dealer. By getting preapproval, they will have a threshold of the best lending rate they’ll pay. 

Create a budget and factor in the different elements of ownership before purchase—not just monthly payments. Other factors to consider when making the budget include insurance, gas, routine maintenance, etc. 

Typically, three negotiations occur when purchasing a vehicle—the cost of the car, the finance rate and the trade-in value. Keep each transaction/negotiation separate from the other. 

With the current wait times and prices for buying a new car, many people are turning to used vehicles. Check out our TrueCar Used Auto Buying program at AAA.com/AutoBuying to find some of the best deals and lowest prices on used vehicles, plus financing, insurance and more!

Visit newsroom.aaa.com to discover several additional resources to use while car shopping, including the
AAA Car Guide.