Keeping a car on the road has become an increasingly costly endeavor beyond just the initial purchase price.
A 2024 study conducted by AAA revealed that in 2022, the average cost to own and operate a new vehicle was approximately $10,728 per year, which breaks down to $894 per month.
This figure marked a “considerable increase” from 2021, when the yearly expense was $9,666, or about $805.50 per month, according to AAA.
As gas prices continue to rise, many drivers are beginning to question whether buying a new car is even worth the financial burden.
Fuel costs are just one of the many factors contributing to the overall expense of owning a car. Drivers also face significant costs related to repairs and insurance, which can add up quickly.
A local Jacksonville, Florida, news station, vehicle owners in Georgia bear the heaviest financial burden, spending an average of $687 per month on vehicle upkeep.
However, there is a way for buyers to potentially save thousands of dollars when purchasing a new car.
Some states, including Alaska, Delaware, Montana, Oregon, and New Hampshire, do not impose sales tax on vehicle purchases. Buyers who take advantage of this could see significant upfront savings.
For many Americans, driving is not a luxury it is an essential part of daily life.
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In some states, public transportation options such as buses and trains are either extremely limited or nonexistent, making car ownership a necessity for getting around.
A report from Data for Progress found that many voters feel they have “no choice but to use cars as much as they do” because of the lack of alternative transportation methods.
Meanwhile, concerns are growing over the impact of President Trump’s proposed tariffs on the auto industry. Both consumers and dealerships are closely watching how these potential policy changes could influence vehicle prices.
Tips for Buying a Used Car
For those considering a used vehicle instead of a new one, experts from U.S. News & World Report recommend keeping the following tips in mind:
- Set a realistic budget: Certain vehicles come with higher costs for insurance and registration, depending on factors such as engine type, body style, weight, and the number of doors. Before negotiating with a salesperson, it’s important to determine what is affordable.
- Research your needs: Choosing a car that aligns with your lifestyle can save both time and money. For example, a sedan may be more practical for narrow city streets, while a truck might be necessary for towing or hauling.
- Consider certified pre-owned vehicles: These cars come with manufacturer-backed warranties and are often available at competitive prices. Some automakers offer better deals than others, so thorough research is essential.
- Be cautious with financing options: If financing is necessary, it’s important to compare different options carefully. Getting preapproved by a bank beforehand can provide insight into affordable interest rates and give dealerships an incentive to match or beat those rates.
- Get a used car inspection: Spending around $200 on a professional inspection can help identify potential issues with a vehicle before purchase.
- Check the vehicle history report: Before finalizing a purchase, obtaining a report based on the car’s VIN can provide valuable information about previous owners, maintenance history, title status, and more.
The president has put forward a proposal for a 25% tax on auto parts imported from Canada and Mexico.
Under this plan, each time a vehicle component crosses a border, an additional fee would be applied.
As a result, car manufacturers are looking for ways to shift production to the U.S. in order to avoid these added costs.
For example, Honda recently announced plans to produce one of its vehicles at a factory in Indiana rather than in Mexico.
Greg Brannon, AAA’s director of automotive engineering, noted that today’s consumers are paying much closer attention to the costs of owning a vehicle beyond just their monthly payments.
“Consumers are paying more attention when purchasing a new vehicle since everything is more expensive right now,” Brannon stated.
“With the recent increase in fuel prices, more and more people want to know the true costs of owning a car beyond their monthly payment.”
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