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The True Cost of Annual Vehicle Ownership Is on the Rise

AAA Analysis Reveals Spike in Finance Costs Driving Increase

19-0455_PA_Your-Driving-Costs-2019-Graphics-1_depreciation 1

It’s going to cost more for those looking to buy a new car this year. Finance costs on new car purchases have jumped 24% in 2019, pushing the average annual cost of vehicle ownership to $9,282, or $773.50 a month. That’s the highest cost associated with new vehicle ownership since AAA began tracking expenses in 1950, and a reminder that the true costs of owning a vehicle extend far beyond maintenance and fuel.

“Purchasing a vehicle can be a very big move, and potential buyers should be aware that total cost extends further than purchase price,” says Mike Hoshaw, vice president of automotive services, AAA East Central. “Keeping these costs in mind when considering if a new vehicle fits within their budget can save them a lot in the long run.”

As federal interest rates and new car prices rise, finance charges rose from $744 to $920, a nearly $200 increase. This comes as 72-month car loans have become increasingly common – meaning car buyers are paying more, and longer, for vehicles that lose value the moment they leave the lot. Long-term loans offer lower monthly car payments, but they ultimately cost the consumer more. AAA found that, on average, every 12 months added to the life of a loan adds nearly $1,000 in total finance charges.

“This trend may save vehicle owners money month to month, but can do more damage to their wallets over the years,” said Hoshaw.

These new figures come from Your Driving Costs, which reviews nine categories of vehicles – consisting of 45 models – to determine the average annual operating and ownership costs of each. AAA focuses on top-selling, mid-priced models and compares them across six expense categories:

  • Fuel prices
  • Maintenance/repair/tire costs
  • Insurance rates
  • License/registration/taxes
  • Depreciation
  • Finance charges 

According to this year’s analysis, annual average costs increased in each of these categories.

Of all costs, depreciation, a measure of how quickly a car loses value, remains the single biggest cost of ownership, accounting for more than a third (36%) of the average annual cost. It slowed a bit this year, with vehicles included in the study losing an average of $3,334 a year. This marks a 1.4% increase from last year, compared to the 3.7% increase in 2018. Conversely, in two vehicle classes this year – small and medium sedans – depreciation costs actually declined.

Other key findings of this year’s Your Driving Costs:

  • Average fuel cost rose to 11.6 cents per mile, 5% higher than last year. The per-mile increase was driven by gasoline prices, which are up 15.6 cents per gallon over the time frame covered by the study. Electricity prices for EV charging also rose 0.1 cent per kilowatt-hour (0.08%), but the market share of the electric vehicles in the study (0.48%) makes the effect of this increase on the overall average fuel cost negligible. Fuel costs vary widely by vehicle type, ranging from a low of 3.65 cents per mile for electric vehicles, to 15.67 cents per mile for pickup trucks.
  • Average maintenance and repair costs climbed marginally to 8.94 cents per mile, up 8.9% over last year. The increase was fueled by the growing complexity of vehicle systems and an updated methodology for calculating repair costs.
  • Electric vehicles had the lowest maintenance and repair costs – 6.6 cents per mile – while medium-sized SUVs had the highest at 9.6 cents per mile.
  • The cost of licenses, registration fees and taxes rose $14 to $753 per year, an increase of 1.9%
  • Average annual costs by new vehicle category (based on 15,000 miles driven annually):

New Vehicle Category

Annual Cost

Small Sedan






Small SUV


Medium Sedan


Medium SUV


Large Sedan




Additional information and details can be found at

When purchasing a vehicle, research is key, as is acting carefully and methodically. is a comprehensive resource that can help make the process more manageable. AAA advises consumers keep these tips in mind:

  • Know your budget. Know what you can afford to spend before going to the dealership, and stick to that figure.
  • Minimize finance costs. Get the shortest loan term you can afford to keep your overall costs down.
  • Timing is key. Seasonally, the best times to buy tend to be the last two weeks of December – when dealers are trying to hit year-end goals – and, to a lesser extent, between July and October. That’s when dealers are trying to clear lots to make way for the next year’s models. The best time of the month to buy is towards the end because sales managers like to build campaigns around monthly quotas.
  • Consider buying pre-owned. New cars lose around 20% of their value right after they’re purchased, so you can save big if you look for a car that’s a year or two old. Your insurance costs could be less, too.
  • Use your membership perks. If you belong to AAA or a similar organization, you may qualify for dealer discounts. Dealer networks sometimes agree to limit profits when selling to club members, though the deals will be limited to certain makes and models.

About the Study: AAA’s Your Driving Costs study employs a proprietary AAA methodology to analyze the costs of owning and operating a new vehicle in the United States. The methodology incorporates standardized criteria to estimate the costs of using a new vehicle for personal transportation over five years and 75,000 miles of ownership. Your Driving Costs is designed to help consumers make informed vehicle purchase decisions and budget for annual automotive expenses.

CST 1016202-80 Copyright © AAA East Central. All Rights Reserved.
AAA East Central is a member club affiliated with the American Automobile Association (AAA) national federation and serves members in Kentucky, New York, Ohio, Pennsylvania and West Virginia.