New cars are expensive, but you already know that.
You might not be thinking about the total cost of ownership, however.
An analysis released in September by AAA puts the average annual cost to own and operate a new vehicle at $12,863, or $1,071.92 per month. That’s higher than last year’s analysis showing $11,577, or $964.78, but AAA cautions that changes in its methodology mean it doesn’t offer a direct comparison. The analysis covers five years and 75,000 miles of ownership.
Still, there’s no doubt costs are high.
Just ask Ray Shefska, who runs a car-buying YouTube channel and website with his son, Zach.
He pointed to new data from J.D. Power showing that average new-vehicle payments for September are expected to hit a record $821 per month.
“To me, that’s an astronomical number,” he said.
Echoing AAA’s Your Driving Costs analysis, Shefska said there’s much more to consider than just price, even though many people fixate on the monthly payment.
Take depreciation. Shefska said he often hears that depreciation doesn’t matter until you sell your car. But “you should care. It’s still depreciation,” he said.
AAA found that depreciation equals a $4,422 loss in value per year.
Here are some other takeaways from AAA’s analysis:
- Small sedans, at 61.73 cents per mile, had the least expensive overall costs.
- Medium SUVs, at 96.32 cents per mile, were the second-most expensive category to own and operate, behind half-ton pickups at $1.10 per mile.
- The national average cost for license, registration and taxes was $802 per year.
- Maintenance, repair and tires cost 11.7 cents per mile.
- Fuel averaged 17.3 cents per mile over a 12-month period ending May 26, so the figure does not account for more recent increases.
Shefska’s advice for consumers considering a new car: Consider your needs rather than your wants, and live within your means.
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