AAA: New vehicle ownership costs hit $12,863 annually

For more than 75 years, AAA’s Your Driving Costs (YDC) analysis has helped drivers understand the full cost of vehicle ownership. This year’s analysis finds that the average annual cost to own and operate a new vehicle is $12,863, or $1,071.92 per month.

This reflects continued increases in fuel prices, depreciation and finance charges. In 2025, the total annual cost was estimated at $11,577, or $964.78 per month. Note: Methodology updates make this year’s results not directly comparable with last year’s estimate.

“By looking at EVs, hybrids and traditional gas-powered vehicles within the same categories, consumers can better understand how total ownership costs vary by powertrain,” said Greg Brannon, AAA’s director of automotive engineering. “Looking at the full ownership picture—including depreciation and other expenses—can help consumers better understand the total cost of each option.”

This year’s Your Driving Costs analysis integrates select electric vehicles (EVs) and hybrids into standard vehicle categories that used to be exclusively traditional gas-powered models, reflecting their growing share in the new-car market.

Key Cost Themes

• Fuel Prices – At the time of the study, the regular-grade gasoline used by nearly all YDC vehicles averaged $4.152 per gallon, while electricity for home EV charging averaged 18.0 cents per kilowatt-hour. Gas prices are up 31.8% compared to 2025, while electricity prices rose only 7.8%, improving the relative affordability of EVs and hybrids; however, fuel economy alone did not determine the most affordable vehicle to own.
• Depreciation — The difference between a car’s purchase price and resale value remains the single largest ownership cost, with vehicles losing a weighted average of $4,422 per year. Vehicle type and purchase price both have a significant effect on depreciation for EV shoppers; for example, EV medium sedans had about twice the depreciation of gas-powered models, helping push total ownership costs 29.1% higher in that category.
• Car Prices – The sales-weighted average MSRP of new vehicles this year is $39,376. While MSRPs increased slightly on average, incentives, demand and rebates can affect what consumers ultimately pay. The actual purchase price is used to calculate finance costs and depreciation.

EV and Hybrid Comparison Takeaways

By comparing select electric and hybrid models within the same categories as gas-powered vehicles, AAA gives shoppers a more practical view of how ownership costs compare across powertrains.

• Gas-powered vehicles: Overall, gas models offered savings compared to EVs and hybrids in cost categories affected by purchase price, like finance charges, taxes and fees, and depreciation. For example, gas-powered medium sedans cost $10,582 per year to own — $3,080 less than comparable EV medium sedans, which had significantly higher depreciation, fees and finance costs.
• Electric vehicles: EVs delivered the lowest fuel costs, with charging costs for EVs about 66%–70% lower than fuel costs for traditional gas vehicles across the categories studied. However, those savings were often outweighed by higher depreciation, fees and finance costs; medium-sedan EVs, for example, cost 29.1% more to own annually than gas-powered models.
• Hybrids: Hybrids were the most consistently lower-cost alternative to gas in the comparison categories. They combined meaningful fuel savings with smaller ownership-cost tradeoffs, costing less annually than gas-powered models in medium sedans, compact SUVs, medium SUVs and pickup trucks.

Car Buying Advice

Vehicle category makes a major difference. ½-ton pickups cost $1.10 per mile to operate — 48 cents more than small sedans — adding an average of $7,191 per year. In comparison, purchasing an EV may help offset annual fuel costs, but higher depreciation can increase total ownership costs over time. Choosing a vehicle that fits actual transportation needs can help buyers manage long-term costs.

• Create a monthly and annual budget that includes ownership and operating costs before purchasing.
• Keep the vehicle price, finance rate, and trade-in value as separate negotiations.
• Get pre-approved by a financial institution, such as a bank, credit union or AAA, before discussing financing with the dealer.