BOISE – After months of putting big purchases on hold, many Americans are finally ready to upgrade their ride. But before they sign on the dotted line, AAA encourages prospective vehicle owners to consider the total cost of buying a new car.
Since 1950, AAA has published Your Driving Costs, an annual guide to help consumers make smart choices about a new vehicle purchase. After calculating the total ownership costs for five top-selling models in each of nine vehicle classes, AAA estimates that the average cost to own and operate a new car in 2021 is $9,666.
“The sticker price is an obvious starting point in the planning process, but it’s also important to factor the lesser-known expenses into the equation,” says AAA Idaho spokesman Matthew Conde. “An accurate budget can help prevent financial struggles and buyer’s remorse down the road.”
The vehicle categories that AAA analyzed include various sizes of sedans, SUVs, and pickups, as well as hybrid and electric vehicles. At just over 77 cents per mile, the most expensive to own and operate is a half-ton pickup. A small sedan is the cheapest option at just over 48 cents per mile.
The cost of vehicle ownership – by the numbers
For this year’s study, AAA gathered data on 45 of the most popular vehicle models in the country. Based on use over five years and 75,000 miles, the average cost of vehicle ownership includes:
- Depreciation – $3,900 loss in value per year (the biggest expense associated with a new car)
- Financing – $712 per year
- Fuel – 10.72 cents per mile
- Insurance – $1,342 per year
- License, Registration and Taxes – $669 per year
- Maintenance, Repairs and Tires – 9.55 cents per mile
Before you buy
In addition to a thorough test drive, AAA suggests that consumers ask plenty of questions before making a purchase, such as the following:
- “Does this car require premium fuel?” “Can I afford to drive it if gas prices go up?”
- “Will I need to purchase gap coverage to cover the difference between what I owe on a loan and what the car is worth in the event of a total loss?”
- “How much more expensive is this car to insure than what I currently drive?”
- “Will I need to take this car to a specialty shop for routine maintenance and repairs?”
- “Will my circumstances change in the future?” “Will any changes to my lifestyle or family dynamic make this purchase impractical in the future?”
AAA reminds new vehicle owners that they’ll usually need to carry comprehensive insurance coverage on their car if they purchase it with a loan. And with a global shortage of the semiconductor chips that are used to make new cars, it may be more expensive to buy one of a limited number of new and used vehicles that are currently available.
“With advanced sensors and on-board computer systems, new technology is often the most expensive to repair and replace, so if you don’t mind missing out on some of the latest bells and whistles, you could save a lot by purchasing a used vehicle,” Conde said. “It will probably be cheaper to insure, and you can avoid most of the depreciation that happens to a new car the minute it leaves the lot.”