Study: Average Annual Vehicle Ownership Cost Nearly $10,000
The average cost of owning a vehicle is now $9,666 per year, according to the American Automobile Association (AAA). While the sum is up substantially over the 2019 average of $9,282, 2020 was sitting at a much tighter $9,561.
Of course, none of this means anything to you unless you happen to drive the most typical vehicle in the most likely manner imaginable. The problem with coming up with a representative figure is that it doesn’t actually represent any one driver or automobile. But AAA was good enough to provide some basic calculation tools to help determine where you fall on the spectrum and some pointers on how to bring those rates down. Though the biggest factor remains which hunk of metal happens to be occupying your driveway.
Running a half-ton pickup with a monstrous motor? AAA has some bad, albeit predictable, news for you relating to your decision to own something from a segment boasting the highest overall driving costs at 77.3 cents a mile.
If that seems a little steep, maybe it’s time to get back into sedans. While not nearly as popular as they once were, they remain a solid value and are typically much more engaging to drive than crossovers. The smaller ones also happen to be the most affordable segment at 48.2 cents per mile. But if we’re sticking with averages, we should probably be talking about crossovers that will run you near 56.3 cents per mile.
But this is assuming you’re averaging 15,000 miles each year. Drive a little more and you’re likely to be saving more. Drive a little less and you’re basically paying to have the car take up space for a few more cents per day. But there is a myriad of factors AAA had to consider before it could reach a determination for any one segment. The main ones are obvious — expensive vehicles that guzzle fuel and need a lot of extra maintenance aren’t going to be a blessing to your bank account.
Though there’s plenty more to consider, including the average insurance rates, the kind of financing rates each segment is likely to get, registration fees, and the dreaded deprecation rate. Some of those can be a game-changer. For example, you might think electric vehicles would have to be cheaper to own than just about anything. But AAA has them at 61.9 cents per day due to their comparatively high level of deprecation. Hybrids weren’t much better at 60 cents per mile, despite the similar focus on efficiency, and both segments tend to yield MSRPs notably steeper their a similarly sized vehicle that’s entirely dependent upon liquid fuel. That said, there will be exceptions to the rules in literally every segment.
The only sweeping generalization able to be made is that size of a car can heavily influence how much you’re spending to own it each year. Opting for a big car is typically more expensive than a smaller one, something that’s likely to be true upon the initial purchase and will remain true well into the unit’s lifespan. This likewise goes for how you treat it. A heavily modified vehicle subjected to routine abuse on a racetrack isn’t a business venture, just a fun way to lose money.
[Image: New Africa/Shutterstock.com]
A staunch consumer advocate tracking industry trends and regulation. Before joining TTAC, Matt spent a decade working for marketing and research firms based in NYC. Clients included several of the world’s largest automakers, global tire brands, and aftermarket part suppliers. Dissatisfied with the corporate world and resentful of having to wear suits everyday, he pivoted to writing about cars. Since then, that man has become an ardent supporter of the right-to-repair movement, been interviewed on the auto industry by national radio broadcasts, driven more rental cars than anyone ever should, participated in amateur rallying events, and received the requisite minimum training as sanctioned by the SCCA. Handy with a wrench, Matt grew up surrounded by Detroit auto workers and managed to get a pizza delivery job before he was legally eligible. He later found himself driving box trucks through Manhattan, guaranteeing future sympathy for actual truckers. He continues to conduct research pertaining to the automotive sector as an independent contractor and has since moved back to his native Michigan, closer to where the cars are born. A contrarian, Matt claims to prefer understeer — stating that front and all-wheel drive vehicles cater best to his driving style.
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Dont forget about the x-factor on used cars. Its when something breaks on it, lets say the transmission gives up the ghost. Well, most people will have to think long and hard over whether to have it fixed or to have it towed away. And in the latter case, that would be a complete loss of a car for you. So if your car was valued at 3k, well, it won't be worth anything in the junkyard. You just added 3k to your yearly average. Got to factor risk into the equation.
I have calculated this for nearly 40 years. As for much of that time I used a vehicle/vehicles for business purposes so had to track all of the costs. Currently two vehicles in the driveway, down from the five that I had just under two years ago. 1. Leased. $302 per month tax in (just over $3,600 per year). Zero down. Maintenance costs are only oil/filter changes, etc. Negotiated a set of rims and winter tires. Do not expect to have to purchase new tires (mileage and age) or any unexpected maintenance (warranty) during the term of the lease. That cost allows me to drive a vehicle that is never more than 4 years old, has the latest 'safety' gadgets and gets better mileage. 2. Now in its 12th year. Has outlasted 5 other vehicles intended to be its replacement. Purchase cost/price amortized comes to about $2,000 per year. Have had to buy multiple sets of tires. Rustproofing (Krown) every year. Battery replaced twice. We no longer use it for long trips. Maintenance includes brake jobs, fluid changes, etc. Insurance on the older vehicle is about $300 less per year. The older vehicle despite being lighter uses more fuel per mile. Which makes better sense financially? Which makes better sense regarding peace of mind?