The cost to own a vehicle continues to rise - and significantly so. In 2023, the average cost to own and operate a car is more than $12,000. Compare that to last year's roughly $10,700 a year.
The new data comes via AAA's Your Driving Costs (YDC) annual report. Researchers say based on the latest figures, the average cost of owning and operating a new vehicle in 2023 has increased significantly, with an annual expense of $12,182 or a monthly cost of $1,015. In 2022, the average yearly cost was only $10,728, or $894 monthly.
“It’s important for car buyers to clearly understand the costs associated with owning a new vehicle,” said Greg Brannon, AAA’s director of automotive research. “Due to global supply chain issues and constrained inventory of new vehicles, car prices rose dramatically in 2022. And while the situation continues to improve, the spillover effects are keeping prices high.”
Researchers say this year's higher ownership costs are driven by record new vehicle prices and a 90 percent increase in finance rates.
AAA says the overall average manufacturer’s suggested retail price (MSRP) of the new vehicles in the 2023 YDC study is $34,876. This is $1,575 (4.7%) higher than last year. Researchers say it's important to note that MSRP doesn't mean that's what the buyer actually paid and that actual purchases prices may vary depending on demand.
A higher sticker price directly impacts finance costs, with this year’s vehicles boasting an average annual finance charge of $1,253, a 90% increase from the previous year.
On the other hand, fuel costs are actually down this year, by roughly 2 cents per mile. Last year fuel costs were one of the higher annual cost categories. Meanwhile, the cost of charging EVs is up almost 2 cents per kWh over last year, from 13.9 cents per kWh to 15.8 cents per kWh. AAA says the increase is likely accounted for by higher-than-expected inflation, according to the U.S. Energy Information Administration (EIA).
AAA uses five top-selling models in each of nine vehicle categories to calculate ownership costs across a number of areas. These are then combined and averaged to determine the overall cost to own a new car in 2023.
The costs for each of these categories as listed below are an average calculated over five years and 75,000 miles.
Half-ton pickups have the highest cost of ownership in the YDC study. Researchers say the pickup truck market has slowed over the past 12 months, as gas prices trend high and financial costs climb. Pickup trucks excel at hauling and towing, although many buyers do not use them for these purposes. Potential buyers should remember that the unique capabilities of pickups come at a high cost of over $1 per mile.
“The once popular pickup truck is now seeing a slight decline in demand as these vehicles have become increasingly expensive, rivaling the price of many luxury cars,” said Brannon. “As interest rates continue to climb, this adds a layer of expense per month that consumers should consider when shopping for their next vehicle.”
Half-Ton Pickups have an overall driving cost of $1.06/mile. Midsize SUVS are next in line at 79.81¢/mile, followed by mid-size pickups at 81.72¢/mile.
Small sedans have the lowest cost of ownership at 59.59¢ a mile. Medium sedans are next at 73.65¢/mile but they are the most expensive to insure. Subcompact SUVs are the third lowest for depreciation which puts the cost of ownership at 64.79¢/mile.
Electric cars cost 67.41¢/mile to own. AAA says they are the least expensive for maintenance, repair & tire costs, fuel and licenses, registration & taxes, but the highest for depreciation. Hybrids are less expensive to own at 64.33¢/mile. They are the second least expensive for fuel & maintenance costs.
With all this in mind, AAA is sharing some tips when it comes to car buying.
If you'd like to calculate your driving costs you can use AAA's handy Your Driving Costs online calculator. Data is available for new and used vehicles (five model years back). You can customize the results based on location and other personal driving tendencies.
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