New Cars Lose $3,000 Annually from One Single Expense

AAA study details cost of owning and operating a new vehicle

AAA’s annual Your Driving Costs study finds the average cost to own and operate a new vehicle in 2018 is $8,849 per year, or just under 59 cents per mile, for vehicles averaging 15,000 miles of annual driving. And while fuel, maintenance, repairs, and insurance get most of the attention, the largest expense associated with buying a new car is something many drivers fail to consider – depreciation.

“Depreciation accounts for almost 40 percent of the cost of owning a new vehicle, more than $3,000 per year,” said John Paul, AAA Northeast Car Doctor. “Car buyers need to consider length of ownership and resale value - not just the purchase price - when shopping for their next vehicle.”

Buyers often only give priority to purchase price and monthly payment when choosing a new car, sometimes selecting a vehicle based on the best deal available. The length of car ownership, however, is of equal importance. Consumers who plan to keep a vehicle for only a few years should be cautious of deep discounts and incentives offered by automakers and dealers. These are often designed to sell less popular models and directly influence depreciation.

 “The secret to minimizing depreciation costs?” continued Mr. Paul. “Keep your car for a long time and keep it well-maintained or even consider buying a quality, pre-owned vehicle.”

The annual driving cost study looked at 45 top-selling 2018 model-year vehicles across nine categories.

Vehicle Type

Annual Cost*

 

Vehicle Type

Annual Cost*

Small Sedan

$6,777

 

Minivan

$9,677

Hybrid

$7,485

 

Medium SUV

$9,697

Small SUV

$7,869

 

Large Sedan

$9,804

Electric Vehicle

$8,384

 

Pickup Truck

$10,215

Medium Sedan

$8,866

 

Average

$8,849

*Based on 15,000 miles driven annually

While the latest technology, style and options make them attractive to car buyers, a new car may not be the most economical choice for some buyers. Vehicle owners looking for alternatives to new car ownership or ways to minimize their operating costs should consider the following:

  • Buy (gently) used – By driving a pre-owned vehicle in good condition, ownership costs are significantly lower. A safe, reliable vehicle can be found at an attractive price point.
  • Fuel responsibly – Avoid wasting money on premium grade gasoline unless your vehicle specifically requires it and, if you’re one of the 20 percent of Americans considering an electric car, these vehicles offer lower fuel and maintenance costs.
  • Show your car some love – It sounds counterintuitive, but spending money on routine maintenance can actually save you money in the end. To keep engines running cleaner and longer, consider switching to synthetic oil and upgrading to a higher quality fuel TOP TIER™ gasoline.
  • Slow down – When gas prices are high, small changes in the way you drive can make a big difference.

 


CapeCodToday.com welcomes thoughtful comments and the varied opinions of our readers. We are in no way obligated to post or allow comments that our moderators deem inappropriate. We reserve the right to delete comments we perceive as profane, vulgar, threatening, offensive, racially-biased, homophobic, slanderous, hateful or just plain rude. Commenters may not attack or insult other commenters, readers or writers. Commenters who persist in posting inappropriate comments will be banned from commenting on CapeCodToday.com.