The true cost of car ownership exceeds $1,000 a month for the 1st time ever
While the average car payment in Q4 2024 was $742 a month, ownership expenses didn’t end there (and still don’t). There’s a lot more that goes into driving your vehicle…and most people underestimate them. Once you add insurance, fuel, and maintenance, you can quickly cross the $1,000 mark. Why is this a big deal? Well, this is the highest estimated monthly cost of ownership for average Americans, ever.
The true cost of car ownership just crossed $1k a month for most Americans
Here’s the breakdown of car expenses for most Americans last year:
| Expense | Monthly Cost |
| Car payment | $742 |
| Insurance | $143 |
| Fuel | $186 |
| Maintenance | $126 |
| Total: | $1,197 |
Depreciation zaps a vehicle’s value, fast
Reportedly, a brand-new car loses about $4,200 of its market value in just the first year on the road. That’s about $350 a month gone out the window. Accounting for other fees like taxes, registration, and plates, all told, then, most Americans are losing $1,650 a month driving a car.
So, when you’re at the dealership and they show you the $700 car payment, you might think it’s no biggie. But, “Understand the true cost of ownership,” Braiden Shaw warns. He’s a finance consultant and entrepreneur with more than a million followers. “$1,650 a month is probably not doable for the vast majority of Americans.”
What should you do instead of buying a new car?
Shaw says folks should buy a used car that’s between three and five years old. “Drive it into the ground,” he says, “and invest every single dollar that you can, because that is how true wealth is created.”
