New Car Ownership Costs Rise To $1,025 Per Month

The cost of owning a new vehicle continues to climb - but thankfully not nearly as much as last year.  The American Automobile Association's (AAA) 2024 Your Driving Cost (YDC) study finds that the total cost to own and operate a new vehicle is $12,297 or $1,024.71 a month. That's an increase of $115 a month over 2023. In 2023,  the average annual expense was $12,182 or $1,015 a month.  In 2022, the average yearly cost was $10,728, or $894 monthly.

Here's a yearly comparison since 2022: 

• 2024: $12,297 annually/ $1,024.71 monthly
• 2023 $12,182 annually / $1,015 monthly
• 2022: $10,728 annually / $894 monthly

AAA attributes 2024's annual average new vehicle ownership cost increase to two leading culprits: depreciation and finance charges.  

With automakers adding more vehicle choices with major redesigns, AAA advises buyers to consider various factors associated with owning and operating a new vehicle to fully understand ownership costs.    The consumer group advises buyers to consider various factors associated with owning and operating a new vehicle to fully understand ownership costs.  That means considering things like gas, maintenance, and insurance. 

“Buying a new car can be exciting,” stated Greg Brannon, AAA’s director of automotive research. “But consumers should fully understand all the costs of owning and operating a new vehicle from purchase to resale.”  

AAA says depreciation, the difference between the car’s value upon purchase and when sold, is the most significant cost category associated with vehicle ownership in its analysis this year. On average, cars in this year’s YDC lose $4,680 annually. Last year, that number was $4,538. Researchers say the popularity of oversized vehicles with cutting-edge features has resulted in higher new car prices, which results in higher depreciation costs.   

Here's a look at more study data:

• Car Prices—The sales-weighted average manufacturer’s suggested retail price (MSRP) for new vehicles in the study is $38,883, up 0.7% over last year. AAA says it is important to note the MSRP may not always reflect the actual purchase price, and it's something that can vary based on demand. The average MSRP for each vehicle category is weighted based on its share of the total vehicle sales. This means higher-selling categories, such as pick-up trucks, have a larger impact on the average value. 
• Finance Charges- A higher sticker price directly impacts finance costs, with this year’s vehicles incurring an average annual finance charge of $1,332, a 6% increase from the previous year. AAA says: Please note: The sticker price increase may be due to vehicles being replaced in YDC. 

Here are the categories AAA considers in its annual anaylsis:

• depreciation
• finance
• fuel
• insurance
• license/registration/taxes
• maintenance/repair/tire costs

Highest and Lowest Cost of Ownership

Like last year, half-ton pickups once again have the highest cost of ownership in the YDC study.

EVs have the second-highest total ownership costs and AAA says that's due to depreciation, purchase prices, and finance charges. As preferences have shifted to more expensive and larger EVs, it's resulted in growth in these cost categories. EVs  have the lowest fuel cost of any vehicle type, based on a national average electricity price of 15.9 cents per kilowatt hour (kWh). Plus, AAA says because of their design and powertrain, EVs have the lowest maintenance costs.  

Small sedans have the second lowest-cost of ownership. Hybrid vehicles have the second lowest total ownership costs behind small sedans. They have excellent fuel economy and low maintenance costs and also rank near the middle in depreciation, financing, and insurance costs.  Hybrids are attracting a lot of buyers these days. According to AAA's latest EV consumer sentiment survey, one in three U.S. adults (31%) say they would be “very likely” or “likely” to buy a Hybrid.  

“Hybrid vehicles are a reasonable, affordable option for those who want to try the benefits of electrification,” said Brannon. “Hybrids benefit from excellent fuel economy, low maintenance costs, depreciation, and insurance – making them an affordable option for car buyers.”

For a full breakdown of the 2024 study click here.