Seemingly everything has become more expensive this year, and that includes owning and operating a new vehicle.
According to this year’s report:
- The average yearly cost to own and operate a new vehicle in 2022 is $10,728, or $894 per month.
- That’s an 11% increase from 2021, when the average yearly cost was $9,666 or $805.50 per month. .
- In Illinois, the average yearly cost to own and operate a new vehicle in 2022 is $11,019 – 3% higher than the national average.
- Not surprisingly, fuel prices are the most significant factor pushing this year’s average annual price tag.
“High gas prices are not only changing American’s driving habits – it is also changing the way drivers are thinking about future car purchases, “ said Molly Hart, spokesperson for AAA – The Auto Club Group. “Recent research tells us that one of the main factors fueling an increased interest in electric vehicles is the potential to save on fuel costs, which adds a little bit more wiggle room in the budget when considering the total cost of vehicle ownership.”
In the most recent analysis, AAA evaluated nine categories of vehicles – consisting of 45 models – to determine a new vehicle’s average annual operating and ownership costs. AAA selects top-selling, mid-priced models and compares them across six categories: fuel, maintenance/repair/tire costs, insurance, license/registration/taxes, depreciation, and finance charges. The study assumes a five-year ownership period, with the vehicle being driven 15,000 miles/annually (or a total of 75,000 miles).
Calculating Fuel Costs
Gas prices saw a dramatic climb in the first half of 2022, raising the cost of vehicle ownership, since the Your Driving Costs evaluation was completed. For this year’s study, fuel costs were projected based on a weighted average of the first five months of 2022. During that time, fuel prices averaged 17.99 cents per mile or $3.999 per gallon.
Comparing Fuel Costs of Electric Vehicles vs. Gas-powered Vehicles
An electric vehicle owner will spend about 4.0 cents per mile to charge their vehicle at home, while the owner of a gas-powered vehicle will spend an average of 18.4 cents per mile to gas up. Assuming both drive 15,000 miles/year, it would cost approximately $2,700/year to fuel the gas-powered vehicle and $600/year to charge the electric vehicle. A difference of $2,100 annually.
Beyond fuel savings, electric vehicles have the lowest maintenance, repair, and tire costs. This is because gas-powered vehicles require additional maintenance such as oil changes, air filter replacements and inspection of mechanical components not present in electric vehicles. Additionally, electric vehicles have the lowest fees due to federal and state rebates offered to buyers of new electric vehicles as a purchase incentive.
AAA Launches New Online Calculator
New this year, AAA launched an online Your Driving Costs Calculator. This tool enables consumers to determine the overall driving costs of a specific vehicle. When visiting the site, consumers can select their desired state, annual mileage and driving ratio that represents their normal driving habits, and vehicle year/make/model/trim.
This online tool employs the same methodology as AAA’s annual analysis of new car ownership. Data is available for new and used vehicles (five model years back), and consumers may customize the results based on location, fuel price, and other personal driving tendencies.
AAA recommends car buyers follow these steps before purchasing:
- Start early! Due to limited inventory, consumers may have fewer choices regarding a specific vehicle model. They may have to wait for delivery or even pre-order the vehicle of their choice.
- Obtain pre-approval from their financial institution (e.g., Bank, Credit Union, AAA, etc.) before discussing finance rates with the car dealer. By getting pre-approval, they will have a threshold of the best lending rate they’ll pay. Buyers can use their pre-approval to negotiate if the dealer offers a higher rate.
- Create a budget and factor in the different elements of ownership before purchase – not just monthly payments. Other factors to consider when making the budget include insurance, gas, routine maintenance, etc.
- Typically, three negotiations occur when purchasing a vehicle – the cost of the car, the finance rate and the trade-in value. Keep each transaction/negotiation separate from the other.
Other resources consumers can use while car shopping:
- AAA Car Guide – easy-to-understand resource that can help improve consumers’ decision-making when it comes to car buying.
- AAA’s Car Buying Program – helps consumers shop for new or used vehicles and compare vehicle pricing online.
***Courtesy of The Auto Club Group***
