According to a survey by the American Automobile Association (AAA), the annual cost of owning a new car has crossed the $10,000 mark. Owning and driving a brand new car in 2022 will cost you a whopping $10,728 per year or $894 per month.
The annual driving cost survey found that the average annual cost in 2022 is $10,728 or $894 per month. That’s a significant cost increase from 2021, when the average annual cost was $9,666 or $805.50 per month. The main factor pushing this year’s price tag is fuel.
Cost of car ownership in 2022
The cost of owning and operating a new car in 2022 has increased by 11% in just one year, while the average annual cost in 2021 was $9,666 or $805.50 per month. Fuel prices were a major factor in the increase in this year’s average annual price label.
The study evaluated nine vehicle categories, including 45 models, to help determine the average annual cost of operation and ownership of a new vehicle. Factors weighed in the study were fuel, maintenance/repair/tire costs, insurance, license/registration/taxes, depreciation and financing costs.
In 2022, fuel prices averaged 17.99 cents per mile or $3,999 per gallon. Gas prices have risen dramatically since early March and as a result, the cost of ownership of vehicles has risen accordingly. Due to the high volatility of fuel costs, car buyers are considering alternative ways to budget the cost of car ownership. One way they are doing this is by exploring electric vehicles as an option for their next car purchase in an effort to cut fuel costs.
Cost of car ownership
The annual price of $10,728 comes by entering into a five-year ownership period where the vehicle is driven 15,000 miles annually, owners will incur expenses. These include annual average depreciation expense ($3,656); loan financing ($658); fuel (17.99 cents per mile); insurance ($1,588); license, registration and taxes ($675); and maintenance, repair and tires (9.68 cents per mile).
“High gas prices are not only changing American driving habits, they are also changing the way Americans think about future car purchases. While sticker price remains a concern for new car buyers, consumers are also paying more attention to operational costs such as fuel, maintenance and insurance,” said Gene LaDoucer, AAA’s regional director of public affairs.
Which car has the lowest total cost of ownership?
In terms of lower costs, electric cars seem to be more attractive to potential car buyers because they can easily cut costs. For example, an electric vehicle owner will spend about 4.0 cents per mile to charge their vehicle at home, while the owner of a gas vehicle will spend an average of 18.4 cents per mile to refuel. Assuming both drive 15,000 miles in a year, it would cost about $2,700 a year to fuel the gas-powered vehicle and $600 a year to charge the electric vehicle. Electric cars compared to small sedans can save owners about $2,100 annually.
In addition to fuel savings, electric cars have the lowest maintenance, repair and tire costs. This is because gas-powered vehicles require additional maintenance such as oil changes, air filter replacement, and inspection of mechanical components that are not present in electric vehicles. In addition, electric vehicles have the lowest costs due to federal and state discounts offered to buyers of new electric vehicles as an incentive to purchase.
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