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Scan for outdated or missing drivers - takes under a minuteDriver Scan →Clear out junk files and repair common Windows errorsFree Scan →Fix the driver behind crashes, sound loss and screen glitchesFind Drivers →A car’s total cost of ownership is shaped by more than its purchase price. The main costs are depreciation, financing, fuel or electricity, insurance, taxes and registration, maintenance, repairs, and tires. How much each one matters depends on how long you keep the car, how far you drive, where you live, the vehicle’s condition and resale value, and your personal insurance and financing terms.
What costs belong in a total cost of ownership estimate?
For a useful comparison, add up the costs over the same ownership period, then divide by the years or miles if you want an annual or per-mile view. The U.S. Department of Energy’s Alternative Fuels Data Center describes a comprehensive total-cost framework that includes purchase and operating costs, with other costs added when relevant (DOE AFDC TCO framework).
- Depreciation: what you pay for the vehicle minus what you expect to receive when you sell or trade it in.
- Financing: interest and other loan costs, if you finance the purchase.
- Energy: gasoline, diesel, electricity, or another fuel used during ownership.
- Insurance: premiums for the coverage you choose.
- Taxes and fees: applicable purchase taxes, title, registration, licensing, and recurring charges.
- Maintenance, repairs, and tires: scheduled service, wear items, replacement tires, and a reasonable allowance for unexpected repairs.
Keep the accounting consistent. For a cash-cost comparison, do not add loan interest; for a financed purchase, include it. If a benchmark groups taxes or fees into another category, check its definitions before comparing it with your own estimate.
Which factors change the total most?
Depreciation and resale value
Depreciation is the difference between the vehicle’s purchase price and its value when you sell or trade it in. It depends on the price you actually pay, the model, age, mileage, condition, and market demand. It is not a monthly bill, but it is a real ownership cost. Use a realistic resale estimate for your planned ownership period rather than assuming that MSRP or a national average predicts your own result.
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1Clear out junk files and repair common Windows errors2Scan for outdated or missing drivers - takes under a minute3Repair Windows errors before they cause bigger problemsIn its 2025 study, AAA called depreciation the largest cost category and estimated an average of $4,334 per year. That figure represented the gap between new-vehicle purchase price and estimated trade-in value after five years and 75,000 miles under the study’s assumptions; it is not a forecast for every model or owner (AAA 2025 results; AAA 2025 fact sheet).
Loan amount, rate, and term
Interest cost depends on how much you borrow, the rate, and how long you take to repay it. A larger down payment can lower the balance on which interest accrues, but the meaningful comparison is between the actual loan offers available to you. AAA’s 2025 average annual finance cost was $1,131, based on a five-year loan with 15% down at the study’s national average interest rate; the fact sheet also describes taxes and first-year registration fees in this estimate. It is a study figure, not an individual financing quote.
Mileage, efficiency, and driving conditions
More miles generally mean more energy use, maintenance, and tire wear. Fuel or charging cost also changes with vehicle efficiency, local energy prices, and driving conditions such as city versus highway use. An official fuel-economy or efficiency rating is a starting point, not a personalized bill.
AAA’s 2025 study reported average fuel cost of 13 cents per mile, using a 12-month price period ending in May 2025 and an average regular-gasoline price of $3.151 per gallon. Its EV charging assumption was 16.7 cents per kilowatt-hour. Those assumptions should not be treated as today’s local rates or as a universal cost per mile. AAA’s estimator allows users to adjust annual mileage and city/highway mix (AAA driving-cost estimator).
For an electric vehicle, include the prices you expect to pay where you actually charge. Home charging, public charging, and access to charging can produce different costs, so a single electricity-rate assumption may not fit every driver.
Insurance and location
Insurance premiums depend on your location, driving and claims history, vehicle, insurer, coverage limits, and deductibles. Get quotes for the exact vehicles you are comparing, using the same coverage choices and a similar quote date.
AAA’s 2025 average insurance cost was $1,694 per year under a specific profile: full coverage for personal use, a driver under 65 with more than six years of experience and no accidents, living in a suburban or city area. It is not a likely premium for every reader or a substitute for a personal quote.
Taxes, title, registration, and other fees
Purchase taxes and fees may depend on the vehicle price or type; registration and licensing charges can recur. Rules and amounts vary by state and locality, so use the relevant jurisdiction’s current fee schedule. AAA’s 2025 national average for license, registration, and taxes was $813 per year under its study methodology, not a state-specific estimate.
Maintenance, repairs, and tires
Budget for service specified by the manufacturer, wear items, tires, and unexpected repairs. The vehicle’s schedule, age, mileage, condition, parts and labor costs, and how it is used all affect the total. A low routine-maintenance estimate does not eliminate the possibility of a costly repair; keeping a reserve makes the estimate more useful.
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AAA’s 2025 maintenance, repair, and tire estimate was 11.04 cents per mile. It included manufacturer-specified routine maintenance, a comprehensive extended warranty, wear-and-tear repairs, and one replacement tire set over five years. Estimates with different warranty or tire assumptions are not directly comparable (AAA 2025 fact sheet). Check the maintenance schedule for the exact vehicle, and use local labor and parts costs where available. AAA Club Alliance also offers general guidance on keeping and maintaining a car (AAA Club Alliance maintenance guidance).
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.How should you use national ownership-cost benchmarks?
AAA’s latest annual release located for this article, published in 2026, put the average annual cost to own and operate a new vehicle at $12,863, or $1,071.92 per month. AAA said methodology updates mean the 2026 result is not directly comparable with its 2025 estimate of $11,577 per year. Do not interpret the difference between those two totals as a clean year-over-year change (AAA 2026 announcement; AAA 2025 results).
The 2025 total assumed 15,000 miles a year and five years, or 75,000 miles, and used a sales-weighted average MSRP of $38,938 for its sample. That MSRP describes the study’s sample, not what every buyer pays. The study’s category figures also depend on its specified assumptions, including fuel prices, driver profile, and financing. Use these benchmarks to understand which categories can matter, not as a promise of what your own car will cost.
Best Value
How to estimate and compare cars fairly
- Choose one ownership horizon and mileage. For example, estimate five years at your expected annual miles for every car in the comparison.
- Use your likely transaction price and resale estimate. Base depreciation on what you expect to pay and a realistic value at the end of the chosen period.
- Enter actual financing terms. Use the down payment, rate, and term you can obtain, or consistently compare cash purchases without interest.
- Estimate energy from your use. Combine expected miles, vehicle efficiency, local fuel or charging prices, and your city/highway mix.
- Get comparable insurance quotes. Use matching coverage limits and deductibles for each vehicle.
- Add jurisdiction-specific taxes and fees. Include purchase charges and recurring registration or licensing costs over the full horizon.
- Budget service, tires, and repair uncertainty. Follow the exact vehicle’s maintenance schedule and label uncertain repair costs as estimates.
- Compare total cost and cost per mile. If monthly affordability matters, show upfront cash and recurring payments separately from the full ownership total.
For uncertain resale values or repair costs, calculate a low and high scenario instead of presenting a falsely precise single number. AAA’s estimator can help show how state, mileage, and driving mix change a total, but personalized quotes and assumptions are still needed for a household-specific estimate.
Why a cheaper sticker price may not mean a cheaper car
A low purchase price can be offset by faster depreciation, higher financing costs, expensive insurance, greater energy use, or more maintenance and repair costs. Conversely, a higher-priced vehicle may have lower costs in some other categories. The relevant question is not which car has the lowest sticker price, but which has the lower total for your ownership period, location, mileage, and realistic resale assumptions.
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