Buying a car can be an exciting experience. You will need to fill up your tank until your initial premium arrives. That’s when you start to realize the multiple costs associated with owning a car. And it doesn’t count the cost of the car itself. The average cost of a new car is nearly $50,000, while second-hand car buyers pay just under $25,000. The possibility of new tariffs affecting imported cars and auto parts could raise prices than usual in the coming months, adding another layer of complexity to the already-rich financial markets. Adding high insurance, maintenance and gas costs in general can lead to a massive dent in your wallet.
How much does it cost to own a car?
How much does a car cost overall? Let’s start with the average cost of a US vehicle, according to the Kelley Blue Book. In April 2025, the average cost of a new car was $48,699, while a used car averaged $25,547. Of course, your own costs will vary depending on the manufacturer, model, trim and age of the vehicle you are purchasing. But sticker prices are just the beginning. Owning a vehicle is also costly.
The hidden costs of Bankrate’s car ownership investigation, published in August 2024, show that Americans spend an average of $6,684 per year on hidden vehicle costs in addition to paying leases or loans. This study examined annual costs for auto insurance, gas, taxes, maintenance and repair costs. Everything has become more expensive ever since. As of May 2025, the average cost of fully covered auto insurance has increased to $2,692, with the updated hidden cost figure at $7,047. Adding the average monthly payments for new and used cars, Americans spend around $15,951 per year on costs associated with new cars and $13,347 per year on used cars.
Factors that affect car costs
The secondary costs of owning and maintaining a car are important. Includes insurance, gas, maintenance costs and taxes. Let’s take a closer look at how everything breaks out.
insurance
As of May 2025, the average cost of car insurance is $2,692 per year for full coverage and the lowest range is $808 per year. However, the premium may vary depending on where you live, the type of vehicle you drive, your driving history, your insurance company you have chosen, and the type and level of coverage you have purchased. Compare estimates from different airlines and choose the right coverage that suits your needs to avoid unnecessary costs. Talking to an insurance professional may help you maximize the value of your car insurance coverage.
Purchase price and funding
Based on Experian data in April 2025, the average monthly loan payment for a new car is $742, while drivers paying for a used car will pay an average of $525 per month. Based on these numbers, if you’re on a limited budget, it may be better to buy a quality used car to keep your loan costs down.
gas
According to the AAA, the national average cost of gasoline is $3.14 per gallon as of June 4, 2025. However, this rate changes daily and fluctuates dramatically between winter and summer. Your annual gas cost depends on vehicle choice and other factors, such as gas cost per gallon in your town.
The August 2024 report determined that your annual mileage exceeds your state’s average price per gallon of gas and allows you to pay more with the pump. For example, Hawaii drivers average 10,980 miles per year, paying $1,978 per year for gas costs. In comparison, Indiana drivers pay an average of $2,913 per year for gas, despite a lower $3.68 per gallon due to their higher mileage.
Car repair and maintenance
According to the 2024 Operating Costs (YDC) report from the AAA for 2024, if you are driving a 2024 medium sedan, the average price for daily maintenance is 10.89 cents per mile. Taking these numbers into account, the average annual cost of car maintenance is around $1,634. Your own costs may vary depending on the type of vehicle, repair costs for your area, and operating volume. Tracking maintenance costs such as oil changes, tire rotations, and windshield wiper replacements can help improve your budget for these costs.
tax
Motor vehicle tax rates vary from state to state, and even between local governments. Some states, such as Alaska and Delaware, do not have a typical tax on purchasing a vehicle. Alaska has a Motor Vehicle Registration Tax (MVRT), and Delaware has a receipt tax for sellers of goods. Tax rates may vary depending on where you live and the vehicle, but the national average automobile tax is $1,182.
Registration
Registration fees vary by state. Some states charge a flat rate for all vehicles, and they are based on the vehicle’s age, horsepower, or weight registration fee. In states like Oregon, car owners may pay as much as $316 in registration fees. Meanwhile, Alabama residents were able to pay just $23. Register your state vehicle and contact your state’s auto department to see how much it will cost.
Depreciation
Depreciation is not actually a “cost” but it should be noted that as soon as the value of a car drops, the value of the car drops. Car depreciation varies widely based on its make and model, age, location, mileage and how well it is handled. AAA’s YDC survey revealed that the average annual depreciation expense is $4,680 per year. Brand new vehicles usually lose value quickly, so using them to keep your car in good condition can help reduce the depreciation rate of your car.
Direct insight: Is the cost of ownership worth it?
As the cost of ownership of a car rises, some drivers are rethinking the number of cars worth owning. To get a first-hand view, Bankrate’s insurance editorial team turned to R/PersonalFinance, a Reddit forum dedicated to finance and budgeting topics. The following comment answered someone who asked about the real cost of owning a car.
*The quotes and quotes contained on this page have been verified by our editorial team and are accurate as of the date of posting. Outlinked Content may contain opinions or opinions that do not reflect the views or opinions of the Bank.
How to save on car ownership
The cost of owning a car is sudden, but owners may be able to take steps to keep costs down.
- Shop for cheaper car insurance: Insurance companies may offer lower rates than other fees based on individual valuation factors and coverage needs, as they have different algorithms for calculating premiums. Comparing quotes from multiple providers can help you save premiums.
- Choose your car wisely: The make and model of the vehicle you buy will save quickly with a lower price tag and will help you get down the road with lower insurance, repairs and gas costs. When considering a new vehicle, it is a good idea to look into local gas prices, customer reviews, average maintenance costs, and average insurance costs for different manufacturers and models before you settle which vehicle to buy.
- Refinance your car loan: Some car loans can be refinanced at a lower rate. It may be wise to check and check if available rates are low, especially if the market changes since the vehicle was purchased.
- Driver Travel Integration: The more you drive a car, the more maintenance you generally need and the more you spend on gas. It is recommended to consolidate your errands into one trip, to study carpooling with friends and neighbors, and to study public transport options. Even if you drive less, you may be able to reduce your car insurance costs, especially if you are taking part in a telematics program.
- Keep your car: When it comes to repair costs for a vehicle, the best defense is a good crime. Regular maintenance will prevent future repair costs from increasing. Early detection of problems can often reduce repair costs.
