AAA Reveals True Cost of Vehicle Ownership
Average new vehicle will cost nearly $8,500 annually to own and operate
DENVER (August 23, 2017) – Owning and operating a new vehicle in 2017 will cost a driver an average of $8,469 annually, or $706 each month, per a new study from AAA. The annual evaluation of driving costs reveals that small sedans are the least expensive vehicles to drive at $6,354 annually, however small SUVs ($7,606), hybrids ($7,687) and electric vehicles ($8,439) all offer lower-than-average driving costs to U.S. drivers. Conversely, of the nine categories included in the evaluation, pickup trucks are the most expensive vehicles to drive at $10,054 annually.
“While it’s easy to take a new car’s sticker price and calculate a monthly car payment, any seasoned driver knows that a whole lot more goes into paying for a car than just the sticker price,” said AAA Colorado spokesman Skyler McKinley. “We easily calculate the cost of gas every time we go to the pump, but most people don’t factor in depreciation, maintenance, and repair costs over time. Those should be important considerations before you buy a new car – no matter how sweet the deal might seem at first.”
In addition to analyzing the ownership costs for sedans, SUVs and minivans, AAA’s Your Driving Costs study added four new vehicle segments in 2017 – small SUVs, pickup trucks, hybrids and electric vehicles.
Vehicle Type – Annual Cost
- Small Sedan – $6,354
- Minivan – $9,146
- Small SUV – $7,606
- Large Sedan – $9,399
- Hybrid – $7,687
- Medium SUV – $9,451
- Medium Sedan – $8,171
- Pickup Truck – $10,054
- Electric Vehicle – $8,439
- Average – $8,469
According to a recent analysis by IHS Markit, the most popular new car models in Colorado are, in descending order, Ford F-Series pickup trucks, the Dodge Ram pickup truck, and the Subaru Outback. Coloradans looking to purchase a new car, then, should pay special attention to the annual costs for pickups ($10,054) and small SUVs ($7,606).
To estimate the overall cost to own and operate a new vehicle, AAA evaluated 45 2017 model-year vehicles across nine categories and focused on mid-range, top-selling vehicles. AAA’s annual driving cost is based on a sales-weighted average of the individual costs for all of the vehicle types. Key findings include:
Depreciation — the declining value of a vehicle over time — is the biggest, and most often overlooked, expense associated with purchasing a new car. New vehicles lose an average of $15,000 in value during the first five years of ownership. In 2017, small sedans ($2,114) and small SUVs ($2,840) have the lowest annual depreciation costs, while minivans ($3,839) and electric vehicles ($5,704) are at the high end of the scale.
Maintenance and repair
To calculate annual maintenance and repair costs, AAA examined factory-recommended maintenance, replacement tires, extended warranty costs and services associated with typical wear-and-tear. New vehicles, on average, will cost a driver $1,186 per year to maintain and repair.
The inevitable costs associated with maintenance and repair should be an important consideration for car shoppers, as a recent AAA survey found that one-third of U.S. drivers could not afford an unexpected repair bill. AAA Approved Auto Repair facilities offer free vehicle inspections, AAA member discounts and a 24-month/24,000-mile warranty for AAA members. Visit AAA.com/AutoRepair to find a nearby facility.
Fuel costs vary significantly by vehicle type, ranging from 3.68 cents per mile (electric vehicles) to 13.88 cents per mile (pickup trucks). New vehicle owners, on average, will spend just over 10 cents per mile – about $1,500 annually — to fuel their vehicles.
For gasoline-powered vehicles, AAA recommends selecting a TOP TIER gasoline, as its independent research found it to keep engines 19 times cleaner, improving vehicle performance and fuel economy. AAA cautions drivers that using premium-grade gasoline in a vehicle that does not specifically require it is an unnecessary expense.
New to the Your Driving Costs study in 2017, AAA found that electric vehicles have lower-than-average driving costs at $8,439 per year. Without a gasoline engine to maintain, electric vehicles have the lowest annual maintenance and repair costs, at $982 per year. By relying on electricity instead of gasoline, fuel costs are also significantly lower than average, at under four cents per mile. Depreciation, however, is currently extremely high for these vehicles, losing an average of nearly $6,000 in value every year.
A recent AAA survey revealed that 1-in-6 Americans are likely to choose an electric vehicle, the majority motivated by their lower long-term ownership costs.
“While the initial sticker prices for electric vehicles are higher than their gas-powered counterparts, lower fuel and maintenance costs often make them more affordable in the long run,” McKinley said. “To save even more, those in the market for a new car can avoid high depreciation costs by purchasing a used electric vehicle.”
With a focus on the future, the AAA Green Car Guide offers ratings of electric, hybrid, compressed natural gas–powered (CNG), diesel and other high fuel economy vehicles. Visit AAA.com/greencar for more.
AAA’s Your Driving Costs study employs a proprietary methodology to analyze the costs of owning and operating a new vehicle in the United States, using data from a variety of sources, including Vincentric LLC. Additional information and detailed driving costs, including insurance costs, finances charges, registration/license fees, taxes and finance charges can be found at NewsRoom.AAA.com or AAA.com/YourDrivingCosts.
Tips for Lowering Driving Costs
While driving costs vary widely based on driver behavior and vehicle type and usage, there are several ways consumers can reduce their annual driving costs:
- Minimize depreciation costs by purchasing a vehicle that historically holds its value well, or consider a used vehicle.
- Select a less expensive vehicle, or one with higher fuel economy to help offset other costs.
- Shop around for the best rates on insurance and loans.
- Avoid over-maintaining the vehicle. Too-frequent oil changes or other unnecessary services result in higher costs. Always follow the manufacturer’s recommendations.
About AAA Colorado
More than 650,000 members strong, AAA Colorado is the state’s greatest advocate for the safety and security of all travelers. As North America’s largest motoring and leisure travel organization, AAA provides more than 53 million members with travel, insurance, financial, and automotive-related services – as well as member-exclusive savings. For more information, visit Colorado.AAA.com.