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If someone asked you what it costs to drive your car, the first thing that might come to mind is the price of your last fill up at the gas pump, followed closely by car payments and insurance bills. Those are definitely major expenses of vehicle ownership, but would it surprise you to learn you had overlooked the single biggest cost of all?

AAA has been tracking vehicle ownership costs for decades, and motorists are often surprised when they learn the full scope of the costs involved. In 2016, owning and operating an average sedan costs $8,558 per year, which is equal to $713 per month or 57 cents per mile. If these numbers shock you, then consider that they represent a six-year low and a 1.6 percent drop compared to 2015 – mainly because of lower gasoline prices.

Figure 1. AAA driving costs in dollars and percentages for 2016. (AAA image)
Below is a rundown of annual vehicle ownership costs from most to least expensive. The figures are based on a good driver, a new car purchase and a five-year/75,000-mile vehicle ownership period. Naturally, your expenses may vary. For more information and a worksheet to calculate your driving costs, see AAA’s Your Driving Costs brochure at

Individual Driving Costs

Depreciation: $3,759 per year ($313 per month). The rate at which a car’s value decreases over time and mileage rose for 2016 due to strong new-car sales, leading to more used and off-lease vehicles entering the marketplace. This reduced retained value and resale prices.

Insurance: $1,222 per year ($102 per month). Insurance rates vary widely with driver, driving habits, issuing company, geographical area and more. AAA’s insurance cost estimates are based on low-risk drivers with good driving records, but even this group has seen rates rise over the past few years. Some attribute this to lower gas prices, which have resulted in more miles driven, higher numbers of collisions and increased insurance payouts.

Maintenance: $792 per year ($66 per month). While costs vary with the vehicle, modest overall increases in vehicle maintenance come from engines using more expensive semi- or full-synthetic motor oils, increases in extended warranty pricing and rising auto repair shop labor rates. A study by AAA found 35 percent of drivers have skipped or delayed recommended auto service, a practice AAA Approved Auto Repair shops say leads to higher car repair costs in the long run.

License/Registration/Taxes: $687 per year ($57 per month). License, registration and tax costs are impacted by vehicle sales prices and state/local tax rates. In addition to rising prices, many states, counties and cities have increased fees related to vehicle purchasing, titling, registration and licensing.

Finance Charges: $683 per year ($57 per month). The average vehicle finance rate remained about the same in 2016. A modest increase in cost is attributable to higher car prices combined with increased tax, title, license and registration fees, which are typically rolled into the vehicle financing.

Tires: $150 per year ($13 per month). Due to the competitive and dynamic nature of the tire market, tire costs in 2016 are relatively unchanged.

In addition to calculating the driving costs for sedans, AAA determined the annual expenses for minivans and sport utility vehicles (SUVs) as well. Owners of these type vehicles also benefit from lower driving costs in 2016, at $9,262 and $10,255 respectively. However, SUV’s often get relatively low fuel economy so their driving costs rise rapidly along with that of gasoline.

How to Lower Your Driving Costs

There are several ways you can help reduce your annual automotive expenses. To minimize depreciation, purchase a car that historically holds its value well. Also, select a less expensive vehicle or one that offers better fuel economy to help offset other costs. Both insurance and finance costs vary with the provider, so always shop to find the best rates. And finally, perform all factory-recommended car maintenance services, but don’t overdo it by with excessive and unnecessary visits to your mechanic.

Finding Quality Auto Repair

AAA recommends that you plan ahead for vehicle service by finding an auto repair shop and technician you can trust before you need them. provides information on nearly 7,000 Approved Auto Repair facilities that have met AAA’s high standards for appearance, technician training and certification, insurance coverage and customer satisfaction. AAA regularly inspects every Approved Auto Repair facility and surveys their customers to ensure ongoing performance. In addition, AAA members receive special benefits that include auto repair discounts, an extended 24-month/24,000-mile parts and labor warranty, and AAA assistance in resolving repair-related issues.

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