Buying a new vehicle is one of the largest purchases you can make, and taking care of that investment is now more costly than ever before.
Based on fresh research from the American Automobile Association (AAA), the average annual cost to own and operate a new automobile has risen to $10,728, or $894 per month. That is roughly an 11% jump from 2021, when the average yearly cost was $9,666 or $805.50 per month.
AAA, North America’s largest motorist and leisure travel club, attributed fuel prices as a big reason for the increase. Gasoline prices have surged since March, and in tandem with that, the expense of maintaining a vehicle has followed suit. Other factors like insurance and depreciation were too behind the rise.
The study measured nine categories of vehicles consisting of 45 models to help figure out a new vehicle’s average annual operating and ownership costs. Factors rated included: fuel, maintenance/repair/tire costs, insurance, license/registration/taxes, depreciation, and finance charges.
“Consumers are paying more attention when purchasing a new vehicle since everything is more expensive right now,” stated 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.”
With the variability of fuel costs, the study surmised consumers are considering other options to budget for vehicle ownership. One way suggested that buyers look at electric vehicles (EV) as an option for their next car purchase. A recent AAA consumer survey revealed a primary factor contributing to Americans’ desire to buy an EV is to save on fuel costs.
This year’s AAA analysis showed EVs have the second lowest annual ownership costs behind small sedans. It reported, “an EV owner will spend about four cents per mile to charge their vehicle at home, while a gas-powered vehicle owner will spend an average of 18.4 cents per mile to gas up.”
Along with fuel savings, EVs have the lowest maintenance, repair, and tire costs. The reason — gas-powered vehicles require more maintenance like oil changes, air filter replacements, and inspection of mechanical components EVs do not have. Moreover, several states offer tax incentives to offset the cost of buying and insuring an electric car.
Yet, potential new car shoppers should be mindful that electric cars are more costly. The average sticker price on a new EV is about $19,000 more than that of a new gasoline-powered vehicle, according to the United States Natural Resources Defense Council (NRDC), as reported by Compare.com.
As with anything, you may do well to research and examine the pros and cons of buying an EV or gas-powered vehicle to help determine what fits your lifestyle and budget.