AAA Says We’re Paying for Yearly Car Costs Much More Than You’ll Believe
There is more to the yearly car costs of owning a new car than monthly payments, insurance, and gas. The American Automobile Association (AAA) states that your driving costs each year have blown up to $12,182. Or looking at it another way, a bit over $1,000 a month. This is for a car driven between 10,000 to 20,000 miles a year over five years.
There are variables, so let’s look at that first. The AAA study was put together with the top five best-selling vehicles in nine different segments. Most of us think of our costs in the categories at the beginning of this post. But there are plenty more that AAA took into consideration.
What were the criteria for the yearly car costs?
Cost categories were fuel, maintenance, insurance, registration, taxes, finance charges, and depreciation. When this study was done in 2019, the yearly costs came to $9,282 with ownership for five years and an average of 15,000 miles. In 2021, the cost saw a bump of just a few hundred dollars. But for 2022, that cost saw a spike to $12,182.
The variances fall into segment categories. Sedans saw costs of just under $9,000. For SUVs, compacts were a bit over $10,000, a midsize AWD was $12,000, and an EV SUV came in at $10,112. We could call these average costs.
Do these yearly car costs factor in luxury cars?
But they don’t include the popular half-ton pickup truck. The yearly costs for these are $15,858 over a five-year period. So, right from the start, if you want to get those monthly costs lower, don’t buy a pickup; buy a sedan instead.
As for the initial purchase price, the average in this AAA study was $35,000. Luxury cars were not part of the findings, so that may be why the average seems lower than one would expect. Kelley Blue Book puts the average price of a new vehicle at $44,700. Experian Automotive was only slightly lower at $40,851. So, the yearly costs, factoring in these more real-world numbers, could actually be more than in the study.
Can buyers cheat car costs?
Now, one way to beat these costs, besides buying a new sedan over a pickup, is to buy used. That has always been the go-to for those cognizant of the loss of value the second a new car drives off of the dealership lot. But not now.
The drop in new car production over the past two years begat the rise in used car prices. It’s about supply and demand, business 101. Before this giant disruption in vehicle sales, $20,000 could get you a decent three-year-old vehicle. But now, according to iSeeCars, $20,000 probably means you’re in the five- to six-year-old vehicle market.
And all of this is why, on average, vehicles on the road today are 14 years old. Car owners are keeping their cars longer because of all the above conditions.