Between rising interest rates, dealer markups, and low inventories, buying a new car isn’t for the faint of heart.
It’s also not for those without a big bank account as a study from AAA has revealed the average yearly cost to own and operate a new vehicle is $10,728 or $894 per month. That’s $1,062 more than last year and higher fuel prices were the “most significant factor” behind the increase.
While gas prices have fallen from their all-time highs earlier this year, when the national average price of a gallon of regular unleaded peaked at $5.016, prices are still 34 cents higher than a year ago.
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However, for the purposes of the study, “fuel costs were projected based on a weighted average of the first five months of 2022” when prices averaged 17.99 cents per mile or $3.999 per gallon. Of course, fuel prices are only part of the equation as AAA also examined “maintenance/repair/tire costs, insurance, license/registration/taxes, depreciation, and finance charges,” while assuming owners hold onto their vehicle for five years and drive 15,000 miles (24,140 km) annually.
With that primer out of the way, let’s look at the results. Small sedans had the lowest ownership cost at 54.56 cents per mile, while full-size pickups were the most expensive at 86.21 cents per mile. EVs were relatively affordable at 60.32 cents per mile, which made them cheaper than hybrids which came in at 64.61 cents per mile.
AAA pointed out EVs had the second lowest annual ownership cost after small sedans and this was largely due to electricity being cheaper than gasoline. As the organization explained, EV owners will spend around 4 cents per mile to charge at home, while owners of ICE-powered vehicles will spend an average of 18.4 cents per mile to gas up. That might not sound like much of a difference, but it equates to a $2,100 savings if you drive 15,000 miles (24,140 km) annually. EVs also save owners in terms of maintenance.