How Much Does it Really Cost to Own a New Car?

Buying a car is one of the biggest purchases a person will make in their lives. Before embarking on the car buying journey, it’s important to understand how much it will cost beyond just the sticker price. Since 1950, AAA has published its annual Your Driving Costs study that breaks down the cost of owning a new car including depreciation, finance, fuel, insurance, license/registration/taxes, and maintenance/repair.


2020 Costs Broken Down

AAA uses five top-selling models in each of nine vehicle size/type categories to calculate ownership costs across a number of areas. These are then combined and averaged to determine the overall cost to own a new car in 2020. 

This year the overall average cost to own and operate a new car in 2020 is $9,561 — $279 higher than last year. This is attributed to an increase in cost in every area except for fuel and finance charges.

Average Costs Per Mile

Miles Per Year 10K 15K 20K
Average Cost 82¢ 64¢ 55¢


Average cost of a new car: $31,401*


Category Costs

­The costs for each of these categories as listed below are an average calculated over five years and 75,000 miles.

  Cost Change Year Over Year Highlights
Depreciation $3,721 loss in value/year up 12% Increase due to higher average vehicle purchase price of small sedans, large sedans and electric vehicles
Finance $819/year down 11% New car loan interest rate in 2020 was nearly 1% lower than last year.
Fuel 11¢/mile down 8% Gas prices declined in early 2020 due to an increased supply coupled with a decreased demand related to COVID-19.
Insurance $1,202/year up 0.6% Normal market fluctuation
License, Registration & Taxes $851/year up 13% Higher vehicle prices and average sales tax rate increased.
Maintenance, Repair & Tires 9¢/mile up 4% Increase in the national labor rate.



Costs by Vehicle Category

  Cost Highlights
Small Sedan 50.10¢/mile Lowest overall driving costs
Medium Sedan 58.23¢/mile Overall costs fall in the middle of the pack
Large Sedan 74.55¢/mile Second most expensive to drive behind pickups
Small SUV 55.75¢/mile Lowest to insure
Medium SUV 66.91¢/mile Highest maintenance, repair, and tire costs
Minivan 67.34¢/mile Second lowest to insure behind small SUVs
Pickup 75.39¢/mile Highest overall driving costs
Hybrid 54.32¢/mile Second least expensive to drive behind small sedans
Electric 60.79¢/mile Lowest maintenance, repair, and tire costs


How to Calculate Your Own Driving Costs

You can determine the driving costs of your vehicle by keeping records of the various cost categories over the course of a year. This should include trips that represent your normal driving habits. 



AAA uses a proprietary methodology to analyze the costs of owning and operating a new car in the United States. Data is sourced from a variety of sources including Vincentric LLC, and incorporates standardized criteria to estimate the costs of using a new vehicle for personal transportation over five years and 75,000 miles of ownership. The use of standardized criteria ensures AAA estimates are consistent when comparing the driving costs of different vehicle types. Actual driving costs will vary based on driving habits, location, operating conditions and other factors.