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New AAA study reveals true cost of vehicle ownership

Average new vehicle will cost nearly $8,500 annually to own and operate

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Owning and operating a new vehicle in 2017 will cost a driver an average of $8,469 annually, or $706 each month, according to a new study from AAA. The annual evaluation of driving costs reveals that small sedans are the least expensive vehicles to drive at $6,354 annually, however small SUVs ($7,606), hybrids ($7,687) and electric vehicles ($8,439) all offer lower-than-average driving costs to U.S. drivers. Conversely, of the nine categories included in the evaluation, pickup trucks are the most expensive vehicles to drive at $10,054 annually.

“Determining the cost of a new vehicle is more than calculating a monthly payment,” cautioned Daniel Armbruster, spokesperson AAA Texas. “While sales price is certainly a factor, depreciation, maintenance, repair and fuel costs should be equally important considerations for anyone in the market for a new vehicle.”

In addition to analyzing the ownership costs for sedans, SUVs and minivans, AAA’s Your Driving Costs study added four new vehicle segments in 2017 - small SUVs, pickup trucks, hybrids and electric vehicles.

Vehicle Type

Annual Cost*

 

Vehicle Type

Annual Cost*

Small Sedan

$6,354

 

Minivan

$9,146

Small SUV

$7,606

 

Large Sedan

$9,399

Hybrid

$7,687

 

Medium SUV

$9,451

Medium Sedan

$8,171

 

Pickup Truck

$10,054

Electric Vehicle

$8,439

 

Average

$8,469

 

*Based on 15,000 miles driven annually

To estimate the overall cost to own and operate a new vehicle, AAA evaluated 45 2017 model-year vehicles across nine categories and focused on mid-range, top-selling vehicles. AAA’s annual driving cost is based on a sales-weighted average of the individual costs for all of the vehicle types. Key findings include:

Depreciation

Depreciation -- the declining value of a vehicle over time -- is the biggest, and most often overlooked, expense associated with purchasing a new car. New vehicles lose an average of $15,000 in value during the first five years of ownership. In 2017, small sedans ($2,114) and small SUVs ($2,840) have the lowest annual depreciation costs, while minivans ($3,839) and electric vehicles ($5,704) are at the high end of the scale.

Maintenance and repair

To calculate annual maintenance and repair costs, AAA examined factory-recommended maintenance, replacement tires, extended warranty costs and services associated with typical wear-and-tear. New vehicles, on average, will cost a driver $1,186 per year to maintain and repair.

The inevitable costs associated with maintenance and repair should be an important consideration for car shoppers, as a recent AAA survey found that one-third of U.S. drivers could not afford an unexpected repair bill. AAA Approved Auto Repair facilities offer free vehicle inspections, AAA member discounts and a 24-month/24,000-mile warranty for AAA members. Visit AAA.com/AutoRepair to find a nearby facility.

Fuel

Fuel costs vary significantly by vehicle type, ranging from 3.68 cents per mile (electric vehicles) to 13.88 cents per mile (pickup trucks). New vehicle owners, on average, will spend just over 10 cents per mile – about $1,500 annually -- to fuel their vehicles.

For gasoline-powered vehicles, AAA recommends selecting a TOP TIER gasoline, as its independent research found it to keep engines 19 times cleaner, improving vehicle performance and fuel economy. AAA cautions drivers that using premium-grade gasoline in a vehicle that does not specifically require it is an unnecessary expense.

Electric Vehicles

New to the Your Driving Costs study in 2017, AAA found that electric vehicles have lower-than-average driving costs at $8,439 per year. Without a gasoline engine to maintain, electric vehicles have the lowest annual maintenance and repair costs, at $982 per year. By relying on electricity instead of gasoline, fuel costs are also significantly lower than average, at under four cents per mile. Depreciation, however, is currently extremely high for these vehicles, losing an average of nearly $6,000 in value every year.

A recent AAA survey revealed that 1-in-6 Americans are likely to choose an electric vehicle, the majority motivated by their lower long-term ownership costs.

“Although electric vehicles can have higher up-front costs, lower fuel and maintenance costs make them a surprisingly affordable choice in the long run,” said Armbruster. “For even lower costs, car shoppers can avoid high depreciation costs by selecting a used electric vehicle.”

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