It’s time for the American Automobile Association’s (AAA) 2023 “Your Driving Costs” study. The spreadsheet breaks down the average yearly costs of owning a new vehicle and driving it for either 10,000, 15,000, or 20,000 miles. The five top-selling vehicles of 2023 across nine categories are included, from small sedan to half-ton pickup, hybrid, and EV. Sample costs factored in are fuel, maintenance, full-coverage insurance, registration and taxes, finance charges, and depreciation at each mileage level. In 2019, Your Driving Costs came up with an annual outlay of $9,282 for the first five years of ownership, driving 15,000 miles per year. That was a 5% bump over 2018. In 2021, the annual cost had risen to $9,666 for the same use case. This year’s study is out, and no one will be surprised to find costs are up: AAA says it costs an average of $12,182 every year — $1,015.17 every month — to drive for five years at 15,000 miles per year.
That’s almost $1,500 more last year’s study result of $10,728 annually.
The average annual cost to own and maintain a small sedan is $8,939. A compact front-wheel drive SUV needs $10,066, a midsize AWD SUV is $11,971, an electric vehicle is $10,112. It’s the enormous popularity of half-ton crew cab pickups that drives the final figure, their annual costs $15,858. We’d be interested in results that excluded pickups just to see the difference.
No denying it costs more to own any kind of car, though. It starts with MSRPs still being elevated. The knock-on effect is elevated car payments, especially with more new buyers choosing shorter terms to get manufacturer incentives that don’t come with the 84-month terms. And higher interest rates eat up savings no matter the term. Earlier this month, Experian Automotive research said the average monthly car payment is $729 for a new car and $528 for a used car. J.D. Power followed that up with news about the rising costs of auto insurance, rates getting so high that more households have stopped buying coverage. The same story explained that higher insurance premiums are partly due to skyrocketing vehicle repair costs.
Of note, the AAA study doesn’t include luxury cars, so the average MSRP of the new cars among the field is $35,000. Even though that’s up 4.7% from last year, there’s quite the gap between that number and the most recent data on average transaction prices; KBB information for July put the average price paid for a new non-luxury vehicle at $44,700, an amount that’s held pretty steady throughout the year. The KBB number jives with Experian Automotive’s finding that the average loan amount for a new vehicle in Q1 of this year was $40,851.
Going lightly used was once a slam dunk for big savings, but those days are gone for now. A new study from iSeeCars showed that buyers spending $23,000 could get a three-year-old car in 2019, but now, that amount struggles to buy a six-year-old vehicle.