AAA Study: New Cars Costs Nearly $8,500 a Year on Average

It’s no secret that new cars depreciate quickly. Even if you buy a car that holds its value well, in five years you’ll be lucky to sell it for half what you paid for it. But depreciation isn’t the only cost you have to consider. Even if you ignore insurance costs, you still have to pay for maintenance, repairs, and fuel. And according to the latest study from AAA, on average, that all adds up to nearly $8,500 per year.

Specifically, AAA’s report says it costs $8,469 per year to own and operate a new car in 2017. That’s a whopping $706 a month. When broken down by category, though, pickup trucks are the most expensive, averaging $10,054 a year. Small sedans are the least expensive at $6,354 annually. Surprisingly, electric vehicles aren’t significantly cheaper to own than average, costing $8,439 each year.

Depreciation ended up being the biggest cost, as well as one that people tended to overlook. The study found that over five years, new cars typically lost $15,000 in value. And while small sedans held their value the best, losing only $2,114 a year, electric vehicles ended held their value the worst. On average, EVs lost $5,704 in value each year. Maintenance and repair costs were much lower, coming in at $1,186 annually. Fuel costs, meanwhile, varied wildly by segment. EVs were the cheapest, only costing 3.7 cents per mile, while trucks cost 13.9 cents per mile. Altogether, new vehicles averaged about 10 cents per mile, which would be about $1,500 a year for drivers who travel 15,000 miles a year.

Of course, if you’re trying to keep costs down, the obvious solution is to buy used. Maintenance and repair costs may be slightly higher, but you’ll pay less up front and get much more of your money back when you go to sell. This is especially true of electric cars. A Nissan Leaf may cost more than $30,000 new, but used models can easily be found for less than $7,000.

For more information on driving costs, check out AAA’s Your Driving Cost page.

Source: AAA

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