Key takeaways
- AAA’s annual study puts the average cost of owning a new car at about $12,300 a year, or just over $1,000 a month, for a typical 15,000-mile driver.
- The biggest line is depreciation (~$4,700/yr), then insurance (~$1,800–$2,300), fuel (~$1,900–$2,400), finance charges (~$1,300), and maintenance and tires (~$1,500).
- A 3–5-year-old used car typically costs $550–$750 a month all-in — the single biggest saving available.
- Small sedans and compact SUVs run about $750–$900/month new; full-size trucks and large SUVs $1,200–$1,500/month; EVs sit in the middle with low fuel and maintenance but high depreciation.
Ask someone what their car costs and they’ll tell you the payment. The payment is usually less than half of it. Once you add insurance, fuel, maintenance, tires, registration and the value the car silently loses every month, the average American new-car owner is spending over $1,000 a month to drive — more than many people’s rent was a decade ago. This guide breaks that number down line by line, shows how it changes by vehicle type and age, and identifies the handful of decisions that move it most.
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The average cost of owning a car, line by line
AAA’s Your Driving Costs study, the most widely cited source, models a new vehicle driven 15,000 miles a year over five years. Its most recent figures, combined with 2025–2026 insurance and fuel averages, look like this:
| Cost | Per year | Per month | Share | Notes |
|---|---|---|---|---|
| Depreciation | $4,700 | $390 | 38% | Averaged over 5 years; far higher in year one |
| Fuel | $2,100 | $175 | 17% | 15,000 miles at ~$3.40/gal and ~24 MPG |
| Insurance (full coverage) | $2,000 | $165 | 16% | National average; $1,200–$3,500 by state and driver |
| Maintenance, repairs & tires | $1,500 | $125 | 12% | About $0.10 per mile on a newer car |
| Finance charges | $1,300 | $110 | 11% | Average new-car loan, ~7% APR |
| License, registration & taxes | $700 | $60 | 6% | Varies widely by state |
| Total | ~$12,300 | ~$1,025 | 100% | About $0.82 per mile |
Notice what isn’t on the list: the loan payment. It’s not a separate cost — it’s principal (already counted as depreciation plus the equity you keep) and interest (counted as finance charges). Counting “the payment” and depreciation double-counts. Our True Cost of Ownership calculator handles that split correctly for any car you enter.
Cost by vehicle type
| Vehicle type (new, 15,000 mi/yr) | Approx. annual cost | Per month | What drives it |
|---|---|---|---|
| Small sedan (Civic, Corolla, Elantra) | $9,000–$10,000 | $750–$830 | Low fuel and insurance, modest depreciation |
| Hybrid (Prius, Camry Hybrid, RAV4 Hybrid) | $9,500–$10,500 | $790–$875 | Fuel savings offset slightly higher price |
| Compact SUV (RAV4, CR-V, Equinox) | $10,500–$11,800 | $875–$980 | The US default; mid on every line |
| Midsize sedan (Camry, Accord, Sonata) | $10,000–$11,500 | $830–$960 | Slightly cheaper than compact SUVs to run |
| Electric vehicle (Model 3/Y, Ioniq 5, Equinox EV) | $11,000–$13,000 | $915–$1,080 | Lowest fuel and maintenance; highest depreciation and insurance |
| Midsize SUV (Highlander, Explorer, Grand Cherokee) | $12,500–$14,000 | $1,040–$1,170 | Higher price, fuel and tires |
| Full-size pickup (F-150, Silverado, Ram 1500) | $13,500–$16,000 | $1,125–$1,330 | Fuel and price; but the best depreciation of any segment |
| Large SUV / luxury (Tahoe, Expedition, BMW X5) | $15,000–$19,000 | $1,250–$1,580 | Everything is expensive, repairs especially |
New vs used: the biggest lever you have
Because depreciation is front-loaded (see how car depreciation works), a 3-year-old car has already lost about 40% of its value, and loses far less per year from there. Its insurance is a little cheaper, its registration is cheaper in states that tax by value, and the interest on a smaller loan is smaller. Maintenance rises, but not by nearly as much as depreciation falls.
| Compact SUV, 12,000 mi/yr, kept 5 years | New ($34,000) | 3 years old ($22,000) | 7 years old ($13,000) |
|---|---|---|---|
| Depreciation / yr | $3,900 | $1,900 | $1,000 |
| Insurance / yr | $2,000 | $1,800 | $1,400 (can drop collision) |
| Fuel / yr | $1,700 | $1,700 | $1,800 |
| Maintenance, repairs & tires / yr | $900 | $1,400 | $2,000 |
| Finance charges / yr | $1,100 | $750 | $450 |
| Registration & fees / yr | $600 | $450 | $350 |
| Total per month | ~$850 | ~$665 | ~$580 |
The 3-year-old car saves about $185 a month — $11,000 over five years — for essentially the same vehicle. The 7-year-old car saves more, but with more repair risk and time in the shop; it’s the right answer for a second car or a tight budget, and the wrong one if you can’t absorb a surprise $1,500 bill. Use the inspection checklist to keep that risk down.
The costs people forget
- Tires. A set every 40,000–60,000 miles at $600–$1,200 — about $200 a year, more on trucks and performance cars.
- Parking and tolls. Easily $100–$400 a month in major cities; zero in most of the country. The biggest regional swing on the list.
- The sales tax you financed. 6–9% of the price, paid with interest over the loan.
- Add-ons from the finance office. Gap, warranties and protection packages add $30–$80 a month to many loans — and both gap and warranties are cheaper or unnecessary elsewhere.
- Repairs after the warranty. Years 5–10 average $500–$1,200 a year on mainstream cars and $1,500–$3,000 on luxury ones.
Six decisions that cut the total by a third
- Buy 2–4 years old. Saves $150–$250 a month on a mainstream car versus new.
- Keep it 8–10 years. Spreads the purchase cost across years with almost no depreciation.
- Shop insurance at every renewal. The spread between insurers for the same driver is routinely 30–40%; $300–$600 a year is typical savings.
- Finance for 60 months or less at a credit union, with 10–20% down. Halves finance charges versus a 72–84 month dealer loan.
- Choose efficiency. Going from 24 to 40 MPG (a hybrid) saves about $1,000 a year at 15,000 miles.
- Pick a slow-depreciating, cheap-to-insure model. A Toyota or Honda compact SUV versus a European luxury one: about $400 a month difference for similar space.
Enter the price, loan, mileage, MPG and insurance — see the monthly and 5-year total with every cost broken out.
Super Car Digest · $14
The Used Car Buying Playbook
Shopping for a used car? Most buyers overpay in four predictable places. This playbook closes every one of them. Budget worksheet, 15-minute VIN screen, test-drive routine, word-for-word negotiation scripts and a 10-point contract check.
Get the Playbook →Frequently asked questions
What is the average cost of owning a car per month?
About $1,000–$1,050 for a new car driven 15,000 miles a year, according to AAA’s methodology with 2025–2026 fuel and insurance prices. A 3–5-year-old used car typically runs $550–$750.
How much should I budget for car maintenance per year?
Roughly $600–$900 for a car under 5 years old, $1,000–$1,500 for 5–10 years old, and $1,500–$2,500 for older cars — including tires. Double those figures for European luxury brands.
Is it cheaper to own an electric car?
Fuel and maintenance are much cheaper — often $1,000–$1,500 a year less. Depreciation and insurance have been higher, which has roughly offset the savings on new EVs. Used EVs, after the depreciation hit, are often the cheapest vehicles to own per mile.
How much of my income should go to car costs?
Under 10% of gross income by the classic 20/4/10 rule; 15% of take-home is a realistic ceiling for all car costs combined. See How Much Car Can I Really Afford?