by Annual Costs for a New Car
According to AAA, the annual cost of owning a new vehicle is now $11,577. This is $719 less than last year, which is explained by lower fuel prices. Full-size pickups cost almost twice as much as small sedans – 98.54 cents per mile.
Impact of Inflation and Other Factors
Due to inflation, tariffs, and other factors, cars have become significantly more expensive. However, buyers are getting unexpected relief, as the total cost of owning and operating a new car has decreased by $719 compared to 2024.
This is a fairly significant decrease, and it reduces the total amount to $11,577, which is equivalent to approximately $965 per month. Although this amount is still quite high, it reflects a drop of almost 6%.
Factors Reducing the Cost
AAA explains this drop as a combination of factors. Lower fuel prices, reduced depreciation, softer financial expenses, and a steady shift towards more affordable models have all contributed to the decrease.
The study examined the five most popular models in each of the nine vehicle categories to calculate ownership costs across a range of areas. It found that the average new car loses $4,334 per year in value over the first five years, which is less than the $4,680 in 2024.
Costs by Vehicle Category
Electric Vehicles vs. Gasoline Models
Electric vehicles did not benefit as much as gasoline models. Charging costs increased by almost a cent per kWh, and greater depreciation, insurance, fees, and financing raised their overall cost. In comparison, gasoline models enjoyed a reduction in operating costs, with fuel costing an average of 13 cents per mile.
Leaders in Affordability
Among all categories, the study showed that small sedans are the least expensive to operate, costing only 55.87 cents per mile. Hybrids took second place with 63.94 cents per mile due to low fuel costs, as well as reduced maintenance and depreciation.
Third place was a fierce battle between midsize sedans and subcompact crossovers. The latter barely won, as their cost is 66.11 cents per mile compared to 66.37 cents for midsize sedans.
Expensive Pickups
At the other end of the scale, unsurprisingly, full-size pickups turned out to be the most expensive to operate – 98.54 cents per mile. Electric vehicles weren’t far behind – 71.21 cents per mile due to their massive depreciation.
Thanks to the study, drivers can compare different types of vehicles with relative ease. If you drive 10,000 miles per year, a midsize pickup will cost you $7,911 annually. Switching to a full-size model will increase that amount to $9,854, which is $1,943 more per year. That’s a pretty big difference if you don’t really need the capabilities of a half-ton truck.
These changes indicate that the car market continues to adapt to economic conditions, and even despite the general price increase, consumers can find options with lower costs. The shift towards more economical models and lower fuel prices can help offset other expenses associated with car ownership. However, electric vehicles, despite their environmental advantage, still need further improvement in operating costs to become more competitive with traditional vehicles.
