Vehicle Annual Ownership Costs is Nearly $13,000

Do you know how much it costs to own a car? According to the AAA, the average annual cost to own and operate a new vehicle is $12,863, or $1,071.92 per month.

This is up by about $2,000 a year, or $100 a month, since 2025, and reflects continued increases from fuel prices, depreciation, and finance charges.

All new luxury Audi SQ9 three-row SUV_evelynkanter.com — Audi photo

In 2025, the total annual cost was estimated at $11,577, or $964.78 per month.

The report is called AAA’s Your Driving Costs, and includes electric vehicles (EVs) and hybrids into standard vehicle categories that used to be exclusively traditional gas-powered models, reflecting their growing share in the new-car market.

The report concludes that EVs and lower gas use by hybrids doesn’t change the overall ownership figure by much, because of other fixed costs. Those include higher finance charges for vehicles that simply cost more to buy or lease than they used to, and because some models – especially EVs – depreciate more than gas or hybrid models, despite lower maintenance costs.

Key Auto Cost Themes

Fuel Prices –

At the time of the study, the regular-grade gasoline used by nearly all YDC vehicles averaged $4.152 per gallon, while electricity for home EV charging averaged 18.0 cents per kilowatt hour.

Gas prices are up 31.8% compared to 2025, while electricity prices rose only 7.8%, improving the relative affordability of EVs and hybrids; however, fuel economy alone did not determine the most affordable vehicle to own.

Depreciation —

The difference between a car’s purchase price and resale value remains the single largest ownership cost, with vehicles losing a weighted average of $4,422 per year.

Vehicle type and purchase price both have a significant effect on depreciation for EV shoppers; for example, EV medium sedans had about twice the depreciation of gas-powered models, helping push total ownership costs 29.1% higher in that category.

Car Prices –

The sales-weighted average MSRP of new vehicles this year is $39,376. While MSRPs increased slightly on average, incentives, demand and rebates can

affect what consumers ultimately pay. The actual purchase price is used to calculate finance costs and depreciation.

EV and Hybrid Comparison

By comparing select electric and hybrid models within the same categories as gas-powered vehicles, AAA gives shoppers a more practical view of how ownership costs compare across powertrains.

Gas-powered vehicles:

Overall, gas models offered savings compared to EVs and hybrids in cost categories affected by purchase price, like finance charges, taxes and fees, and depreciation.

For example, gas-powered medium sedans cost $10,582 per year to own — that’s $3,080 less than comparable EV medium sedans, which had significantly higher depreciation, fees and finance costs.

Electric vehicles:

EVs delivered the lowest fuel costs, with charging costs for EVs about 66%–70% lower than fuel costs for traditional gas vehicles across the categories studied.

However, those savings were often outweighed by higher depreciation, fees and finance costs; medium-sedan EVs, for example, cost 29.1% more to own annually than gas-powered models.

Hybrids:

Hybrids were the most consistently lower-cost alternative to gas in the comparison categories.

They combined meaningful fuel savings with smaller ownership-cost tradeoffs, costing less annually than gas-powered models in medium sedans, compact SUVs, medium SUVs and pickup trucks.

dangers of distracted driving_ecoxplorer — Photo: Car and Driver

Car Buying Advice

Vehicle category makes a major difference. ½-ton pickups cost $1.10 per mile to operate — 48 cents more than small sedans — adding an average of $7,191 per year.

In comparison, purchasing an EV may help offset annual fuel costs, but higher depreciation can increase total ownership costs over time. Choosing a vehicle that fits actual transportation needs can help buyers manage long-term costs.

If you are considering a new, or even recent model used vehicle, take these steps before signing on the bottom line.

Create a monthly and annual budget that includes ownership and operating costs before purchasing.
Keep the vehicle price, finance rate, and trade-in value as separate negotiations.
Get pre-approved by a financial institution, such as a bank, credit union or AAA, before discussing financing with the dealer.

AAA Methodology and Overall YDC Analysis

The analysis discussed here estimates the cost of owning and operating a new vehicle for personal transportation over five years and 75,000 miles. Actual driving costs vary based on driving habits, location, operating conditions, and other factors.

AAA evaluated seven vehicle categories and 34 top-selling models across fuel, maintenance, repair and tire costs, license, registration and taxes, depreciation and finance charges.

For EV and hybrid comparisons, AAA evaluated selected top-selling models in four categories — medium sedans, compact SUVs, medium SUVs and pickup trucks — alongside gas-powered models to show how ownership costs vary by powertrain within the same vehicle categories.

Find out more about the study at AAA.com.

ecoXplorer Evelyn Kanter is an award-winning journalist with 25+ years of experience as a newspaper and magazine writer, radio & TV news producer & reporter, and author of guidebooks and smartphone apps – all focusing on travel, automotive, the environment and your rights as a consumer.