What Is the Total Cost of Owning a Car?

What's the Average Car Payment?

The average monthly payment is $737 for a new car loan and $520 for a used car loan, according to third-quarter (Q3) 2024 data from Experian's State of the Automotive Finance Market report. That said, your car payment may be higher or lower than that depending on a handful of factors, including:

• Sales price of the vehicle
• Down payment amount
• Interest rate
• Repayment term

Before buying a car, it's important to check your free Experian credit report and FICO^® Score^☉ to get a sense of your creditworthiness. Taking steps to improve your credit can help you secure a lower interest rate and, therefore, a lower monthly payment.

Other ways to reduce your car payment include choosing a less expensive vehicle, putting more money down and paying down other debts. While opting for a longer repayment term can reduce your payment amount, it'll ultimately result in higher total interest charges.

Common Costs of Owning a Car

In addition to your monthly auto loan payment—or the sales price if you choose to pay cash—there are several other costs associated with owning a vehicle. Here's a breakdown of what to expect.

Insurance

Most states require that you maintain a minimum amount of liability insurance, and some may also require other types of coverage, such as personal injury protection or uninsured motorist coverage.

If you took out a loan to buy the car, your lender will also typically require you to maintain collision and comprehensive insurance to protect its investment.

The cost of car insurance will vary depending on several factors, including where you live, your demographics, your vehicle, your driving habits and your coverage amounts, among others.

How much insurance costs: The average cost of car insurance is $2,304 a year, or $192 per month, according to 2025 Experian data.

Taxes, Registration and Fees

Most states charge sales tax when you buy a vehicle, the exceptions being Alaska, Delaware, Montana, New Hampshire and Oregon. On top of that, you'll also incur various government-related expenses, such as title fees, license fees and annual registration fees.

Additionally, many states charge annual property or other vehicle-related taxes. These expenses will vary depending on where you live and the applicable tax laws and rates.

How much registration and fees cost: Between the upfront taxes and fees you pay at the time of purchase and the annual fees, the national average is $815 per year, according to AAA.

Fuel

If you're buying a gas or diesel-powered vehicle, your fuel expenses will depend on the vehicle's fuel efficiency, how many miles you drive and the prevailing prices.

If you own an electric vehicle, you'll need to consider electricity costs instead of fuel expenses. This includes at-home charging and charging stations.

How much fuel costs: According to AAA, the average cost of fuel is 14.9 cents per mile driven. With an average of 14,489 miles driven per year, according to the Federal Highway Administration (FHWA), that comes out to $2,159 per year.

For electric vehicles, home charging averages out to roughly $823 per year, according to Kelley Blue Book. However, you may expect to pay more if you rely heavily on public charging stations.

Maintenance and Repairs

Vehicles typically have a set schedule for maintenance needs, including oil changes, tire rotations, air and fuel filters, brakes, fluids, belts, new tires and more. In fact, staying on top of your maintenance schedule can reduce your potential repair costs.

It's important to note that new cars tend to require fewer repairs than used cars. So, if you're buying a used car, it makes sense to set aside more cash for potential problems that may arise.

How much maintenance and repairs cost: According to AAA, maintenance and repair costs average 10.13 cents per mile. With 14,489 miles driven annually, that comes out to $1,468 each year.

Depreciation

Over time, most vehicle models depreciate in value. While that's not an out-of-pocket expense for you, it does impact the amount of money you'll receive if you sell the vehicle or if it gets totaled in an accident.

The vehicle's depreciating value can also have an impact on whether you have positive or negative equity in your vehicle.

How much depreciation costs: On average, new vehicles lose $4,680 in value each year over the first five years, according to AAA.

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Cost of Ownership by Vehicle Type

The cost of owning a car can vary based on several factors, one of which is the type of vehicle you own. Here's a quick breakdown of the average cost by vehicle type:

Based on data from AAA and the FHWA
^*Calculated based on average annual mileage of 14,489

How to Calculate the Total Cost of Owning a Car

The simplest way to calculate the cost of owning a car is to use an online calculator provided by popular automobile websites like Edmunds or AAA. You can enter certain details about your vehicle to get a general idea of what your costs will look like over the next five years.

However, these calculators can only provide an estimate of what your costs will look like. If you want to zero in on actual costs you'll likely incur, here are some steps you can take to get there:

• Check your loan payment. Log in to your online account to get the monthly payment amount, as well as the date you'll pay off the loan.
• Average your fuel or charging costs. Estimate how many miles you typically drive in a year, then look at recent fuel or electricity prices to get a sense of how much you'll pay in fuel or charging expenses.
• Look up state taxes and fees. Each state handles vehicle taxes, registration and other fees differently. Check your state's department of motor vehicles website for rates to get an idea of how much you can expect to pay upfront and each year.
• Estimate maintenance and repairs. While the average car owner spends roughly $1,468 a year on maintenance and repairs, you may want to plan for a higher amount if you're buying an older vehicle or a more expensive model.
• Look at depreciation. Different models depreciate at different paces, so it may help to use an online depreciation calculator to get a good idea of what you can expect.

Because some of the costs related to car ownership, including fuel costs, interest rates, repair needs and depreciation, aren't set in stone, it can be difficult to get an exact cost of ownership. However, with sufficient research, you can likely get a good estimate.

Learn more: How Much Car Can I Afford?

How to Save Money on Owning a Car

Owning a car can be incredibly expensive, so it's important to take steps to minimize your expenses as often as possible. Here are some tips that can help:

• Improve your credit. Building and maintaining a good credit score is crucial for qualifying for a low interest rate on an auto loan.
• Put more money down. You can reduce your total interest costs on an auto loan by making a larger down payment on the purchase.
• Opt for a shorter repayment term. A shorter repayment term will typically result in a higher monthly payment. However, if you can afford it, it can also result in a lower interest rate and fewer total interest charges.
• Choose your model wisely. As you compare different models, pay attention to sales prices, as well as average maintenance and repair costs, fuel efficiency and depreciation.
• Stick to a maintenance schedule. While maintenance is an expense, sticking to your vehicle's maintenance schedule can help avoid costly repairs that result from negligence.
• Get the right amount of insurance coverage. When choosing a car insurance policy, you'll want to find the right balance between your monthly premiums and the financial protection the policy provides. It's also important to shop around and compare car insurance quotes to ensure you're getting the best rate.

Learn more: Ways to Reduce Your Car Expenses Now

The Bottom Line

The total cost of owning a car can vary depending on a number of factors. Whether you're planning to buy a car or you want to better understand the cost of your current vehicle, it's a good idea to estimate your total cost based on the different expenses you'll incur.

Taking the time to research vehicle-related costs can help you make better decisions about your vehicle and your overall financial plan.