his year’s Your Driving Cost (YDC) study reveals that the total cost to own and operate a new vehicle is $12,297 or $1,024.71 monthly, an increase of $115 from 2023.

The leading cost culprits for buyers are depreciation and finance charges. With automakers adding more vehicle choices with major redesigns, AAA advises buyers to consider various factors associated with owning and operating a new vehicle to fully understand ownership costs.   

Depreciation, the difference between the car’s value upon purchase and when sold, is the most significant cost category associated with vehicle ownership in this year’s analysis. On average, cars in this year’s YDC lose a staggering $4,680 annually. The popularity of oversized vehicles with cutting-edge features has led to an increase in new car prices, which results in higher depreciation costs.   

Other factors driving new ownership costs:  

• Car Prices—The sales-weighted average manufacturer’s suggested retail price (MSRP) for new vehicles in the study is $38,883, an increase of 0.7% over last year. It’s important to note the MSRP may not always reflect the actual purchase price and can vary based on demand. The average MSRP for each vehicle category is weighted based on its share of the total vehicle sales. This means higher-selling categories, such as pick-up trucks, have a larger impact on the average value. 
• Finance Charges—A higher sticker price directly impacts finance costs, with this year’s vehicles incurring an average annual finance charge of $1,332, a 6% increase from the previous year. *Please note: The sticker price increase may be due to vehicles being replaced in YDC. 

This year, EVs have the second-highest total ownership costs due to depreciation, purchase prices, and finance charges. Preferences have shifted to more expensive and larger EVs, resulting in growth in these cost categories. EVs have the lowest fuel cost of any vehicle type, based on a national average electricity price of 15.9 cents per kilowatt hour (kWh). Plus, because of their design and powertrain, EVs have the lowest maintenance costs.  

Hybrid vehicles have the second lowest total ownership costs behind small sedans. They benefit from excellent fuel economy and low maintenance costs and rank near the middle in depreciation, financing, and insurance costs. According to this year’s EV consumer sentiment survey, one in three U.S. adults (31%) say they would be “very likely” or “likely” to buy a Hybrid.