Annual Cost to Own a New Vehicle Tops $10,000

New car ownership in 2022 is significantly more expensive than in years past due to gas prices.

August 17, 2022

ORLANDO, Fla.—The average yearly cost to own and operate a new vehicle in 2022 is $10,728, or $894 per month, according to research from AAA. This is a considerable increase from 2021, when the average yearly cost was $9,666, or $805.50 per month. AAA says that fuel prices are the most significant factor pushing this year’s average annual price tag.  

“Consumers are paying more attention when purchasing a new vehicle since everything is more expensive right now,” said Greg Brannon, AAA’s director of automotive engineering. “With the recent increase in fuel prices, more and more people want to know the true costs of owning a car beyond their monthly payment.”

In the most recent analysis, AAA evaluated nine categories of vehicles—consisting of 45 models—to determine a new vehicle’s average annual operating and ownership costs. AAA selects top-selling, mid-priced models and compares them across six categories: fuel, maintenance/repair/tire costs, insurance, license/registration/taxes, depreciation and finance charges. The study assumes a five-year ownership period, with the vehicle being driven 15,000 miles annually (or a total of 75,000 miles).

For this year’s study, fuel costs were projected based on a weighted average of the first five months of 2022. During that time, fuel prices averaged 17.99 cents per mile, or $3.999 per gallon. Gas prices have seen a dramatic climb since early March, and, as a result, the cost of vehicle ownership has increased accordingly since AAA’s research was completed.

Because of the high variability of fuel costs, consumers are considering alternative ways to budget for the cost of vehicle ownership. One way they do this is by exploring electric vehicles as an option for their next car purchase. In fact, a recent AAA consumer survey found the main factor behind Americans’ desire to buy an EV is to save on fuel costs.  

AAA found that EVs have the second lowest annual ownership costs behind small sedans. For comparison, an EV owner will spend about four cents per mile to charge their vehicle at home, while the owner of a gasoline-powered vehicle will spend an average of 18.4 cents per mile to fill up. Assuming both drive 15,000 miles/year, it would cost about $2,700 per year to fuel the gas-powered vehicle and $600 per year to charge the EV. This is a difference of $2,100 annually. 

Beyond fuel savings, electric vehicles have the lowest maintenance, repair and tire costs, AAA says. This is because gas-powered vehicles require additional maintenance such as oil changes, air filter replacements and inspection of mechanical components not present in electric vehicles. Additionally, EVs benefit from federal and state rebates offered to buyers as a purchase incentive. 

A recent Convenience Matters podcast episode discusses if an electric vehicle future is possible. Also, the NACS EV Charging Calculator allows retailers to assess the cost and profitability of offering EV chargers at their sites. The calculator focuses on what retailer utility costs associated with EV recharging are and what the corresponding revenue must be to recover those costs after allowing for potential ancillary in-store visits and purchase profitability.

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