Owning and operating a new vehicle in 2017 will cost a driver an average of nearly $8,500 annually, or $706 each month, according to a new study from AAA. The annual evaluation of driving costs reveals that small sedans are the least expensive vehicles to drive, however small SUVs, hybrids and electric vehicles all offer lower-than-average driving costs to U.S. drivers.
AAA highlights key factors that shape the cost of vehicle ownership for 2017:
Depreciation is the biggest, and most often overlooked, expense associated with purchasing a new car. New vehicles lose an average of $15,000 in value during the first five years of ownership. In 2017, small sedans had the lowest annual depreciation costs, while electric vehicles were at the high end of the scale.
Maintenance and repair
AAA examined factory-recommended maintenance, replacement tires, extended warranty costs and services associated with typical wear-and-tear. New vehicles, on average, will cost a driver $1,186 per year to maintain and repair.
Fuel costs vary significantly by vehicle type, ranging from 3.68 cents per mile (electric vehicles) to 13.88 cents per mile (pickup trucks). New vehicle owners, on average, will spend just over 10 cents per mile – about $1,500 annually – to fuel their vehicles.
New to the study in 2017, AAA found that electric vehicles have lower-than-average driving costs. Without a gasoline engine to maintain, electric vehicles have the lowest annual maintenance and repair costs. By relying on electricity instead of gasoline, fuel costs are also significantly lower than average. Depreciation, however, is currently extremely high for these vehicles.
While driving costs vary widely based on vehicle type, usage and driver behavior, there are several ways consumers can reduce their annual driving costs:
- Minimize depreciation costs by purchasing a vehicle that historically holds its value well, or consider a used vehicle.
- Select a less expensive vehicle, or one with higher fuel economy to help offset costs.
- Shop around for the best rates on insurance and loans.
- Stay on top of preventative maintenance to avoid and follow the manufacturer’s recommendations. AAA estimates drivers can save an average of $100 each time they visit a repair shop simply by properly maintaining their vehicle.
- Reduce mileage and minimize wear and tear by participating in a carpool, taking public transportation or using a car share service.
Determining the cost of a new vehicle car is more than calculating a monthly payment. While sales price is certainly a factor, depreciation, maintenance, repair and fuel costs should be equally important considerations for anyone in the market for a new vehicle.
For more information, visit AAA.com/YourDrivingCosts.
– Michelle Donati is the communications manager at AAA Arizona. Contact her at firstname.lastname@example.org.