Driving Costs Hit Six-Year Low, Finds AAA

Annual Cost To Own And Operate A Vehicle Falls To $8,558 In 2016

BELLEVUE, Wash. — Due to falling gas prices, the annual cost to own and operate a vehicle in the United States has fallen to a six-year low of $8,558 according to AAA’s 2016 Your Driving Costs study. This year, a driver can expect to spend 57 cents for each mile driven, approximately $713 per month, to cover the fixed and variable costs associated with owning and operating a car.

“Thanks to lower gas prices, American drivers can expect to save hundreds of dollars in fuel costs in 2016,” said John Nielsen, AAA’s managing director of Automotive Engineering and Repair. “Fortunately, this annual savings more than offsets the moderate increases in maintenance, insurance, finance charges and other costs associated with owning and operating a vehicle.”

Based on
15,000 mi
Small
Sedan
Med.
Sedan
Large
Sedan
Sedan
Avg
SUV
(4WD)
Mini-
van
Annual
Total Cost
$6,579$8,604$10,492$8,558$10,255$9,262
Annual Cost
Per Mile
$0.4386$0.5736$0.6994$0.5705$0.6837$0.6175

Fuel: DOWN 24.62 percent to 8.45 cents per mile/$1,267.50 per year (-$414)

Compared to last year’s study, the average price of regular fuel fell more than 25 percent to $2.139 per gallon in the fourth quarter. At the same time, vehicle redesigns and improved powertrain technologies increased the average fuel economy of the sedans used in the study to 26.71 mpg.

Insurance: UP 9.60 percent to $1,222 per year (+$107)

Insurance rates vary widely with driver, driving habits, issuing company, geographical area and more. While AAA’s insurance cost estimates are based on low-risk drivers with good driving records, even this group has seen rates rise over the past few years. Rising costs are likely attributable to lower gas prices, which have resulted in more miles driven, greater numbers of collisions and higher insurance payouts.

Depreciation: UP 2.87 percent to $3,759 per year (+$105)

The single largest ownership expense, depreciation, rose for 2016 due to robust new-car sales and, therefore, increasing numbers of used and off-lease vehicles entering the marketplace. This reduces retained value and resale prices, thus increasing depreciation.

Maintenance: UP 3.33 percent to 5.28 cents per mile/$792 per year (+$25 per year)

While there is significant variation among individual vehicles, modest increases in vehicle maintenance are attributable to engines requiring more expensive semi- or full-synthetic motor oils, and increases in extended warranty pricing and shop labor rates.

A recent AAA survey found that 35 percent of Americans have skipped or delayed service or repairs that were recommended by a mechanic or specified by the factory maintenance schedule. According to AAA’s certifiedApproved Auto Repairshops, consumers that forget or ignore recommended maintenance ultimately pay higher repair costs.

License/Registration/Taxes: UP 3.31 percent to $687 per year (+$22)

License, registration and tax costs are impacted by vehicle sales prices and state/local tax rates. In addition to rising vehicle prices, many states, counties and cities have increased their fees related to vehicle purchasing, titling, registration and licensing.

Finance Charges: UP 2.09 percent to $683 per year (+$14)

The average vehicle finance rate remained relatively unchanged in 2016. The modest dollar increase in finance charges is attributable to higher new car prices combined with increased tax, title, license and registration fees, which are typically rolled into the vehicle financing.

Tires: UP 2.04 percent to 1.00 cent per mile/$150 per year (+$3)

Due to the competitive and dynamic nature of the tire market, tire costs in 2016 are relatively unchanged, rising by just .02 cent per mile.

In addition to calculating the driving costs for sedans, AAA determined annual costs associated with both minivans and sport utility vehicles. Owners of these vehicle types also benefit from lower driving costs in 2016, at $9,262 and $10,255 respectively.

“One-in-five Americans plan to purchase or lease a new vehicle in the next year, and many consumers may mistakenly believe minivans are more expensive to drive than a large sedan,” continued Nielsen. “With lower gas prices, these vehicles offer drivers the flexibility of transporting additional passengers and cargo while remaining more affordable to own and operate compared to a large sedan.”

AAA has published Your Driving Costs since 1950. That year, driving a car 10,000 miles per year cost 9 cents per mile, and gasoline sold for 27 cents per gallon.

The Your Driving Costs study employs a proprietary AAA methodology to analyze the cost to own and operate a vehicle in the United States. Variable operating costs considered in the study include fuel, maintenance and repair, and tires. Fixed ownership costs factored into the results include insurance, license and registration fees, taxes, depreciation and finance charges. Ownership costs are calculated based on the purchase of a new vehicle that is driven over five years and 75,000 miles. Your actual operating costs may vary. See AAA’s 2016 Your Driving Costs brochure for a list of vehicles and additional information on the underlying criteria used in the study.

About AAA Washington:

AAA Washington was established in 1904 by 10 prominent Seattleites determined to champion the betterment of motoring conditions and laws, the preservation of Washington state’s natural beauty and the promotion of Washington as an unrivaled tourist destination. Nearly 120 years later, the club continues to pursue these on behalf of its 1.2 million members. 

Members of AAA Washington receive exclusive benefits, including roadside assistance, discounts on hotels and rental cars, comprehensive insurance options, and personalized trip planning. AAA Washington was named a Best Place to Work by Puget Sound Business Journal and voted the best Travel/Tourism Company by 425 Business readers in 2023, and AAA was named one of the most trusted travel and automotive brands in the U.S. Additional information is available through the company’s Washington and northern Idaho stores and at www.AAA.com. 

About AAA Foundation for Traffic Safety:

Established in 1947 by AAA, the AAA Foundation for Traffic Safety is a nonprofit, publicly funded, 501(c)(3) charitable research and educational organization. The AAA Foundation’s mission is to prevent traffic deaths and injuries by conducting research into their causes and by educating the public about strategies to prevent crashes and reduce injuries when they do occur. This research is used to develop educational materials for drivers, pedestrians, bicyclists and other road users. Visit www.AAAFoundation.org.

Media Contact

Fearey o/b/o AAA Washington 
AAA@feareygroup.com 
206-838-9209 

Twitter: @AAA_Washington
Facebook: AAA Washington
Instagram: aaawashington

Interested in planning your next road trip with AAA Washington? Call your travel agent directly or your nearest AAA store to get pro tips, TripTik maps, and more. Find more Pacific Northwest scenic drives and road trips.

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