AAA Study Shows Annual Cost of New Car Ownership in Washington Lowest for Small Sedans and EVs
BELLEVUE, Wash. (Aug. 16, 2022) – As inflation rises, so does the cost of maintaining a vehicle. AAA Washington has released findings from AAA’s Your Driving Costs, an annual study of the average cost to own and operate a vehicle. According to AAA, the average cost to own and operate a new vehicle in 2022 is $10,728, or $894 per month. Not surprisingly, fuel prices are the most significant factor pushing this year’s average annual price tag. This year’s Your Driving Costs analysis reveals that electric vehicles have the second lowest annual ownership costs behind small sedans.
The new online Your Driving Costs calculator allows users to calculate comprehensive cost analyses of a specific vehicle to determine ownership costs that best align with their budget. Data is available for new and used vehicles (five model years back), and consumers may customize the results based on location and other personal driving tendencies.
For drivers in the state of Washington, small sedans like the Hyundai Elantra, Volkswagen Jetta, and Honda Civic are the most affordable options with five-year total driving costs of around $43,000. This vehicle category has some of the lowest MSRPs, annual depreciation, and maintenance costs of the models in the study.
For comparison, electric vehicles in Washington have the second lowest cost of ownership for the same five-year period. Factors like no oil changes, air filter replacements, and inspection of mechanical components keep maintenance and repair costs low. EVs do have some of the highest rates of depreciation, averaging $4,975.60 a year the popular Tesla Model 3, Ford Mustang Mache-E, and Nissan Leaf.
Consumers can also use the AAA Car Guide to learn about the latest automotive technology and research vehicles that best suit their needs. AAA urges car buyers to consider all the expenses associated with ownership to negotiate the best deal for their budget and recommends consumers follow these steps before purchasing:
- Start early! Due to limited inventory, consumers may have fewer choices regarding a specific vehicle model. They may have to wait for delivery or even pre-order the vehicle of their choice.
- Obtain pre-approval from their financial institution (e.g., Bank, Credit Union, AAA, etc.) before discussing finance rates with the car dealer. By getting pre-approval, they will have a threshold of the best lending rate they’ll pay. Buyers can use their pre-approval to negotiate if the dealer offers a higher rate.
- Create a budget and factor in the different elements of ownership before purchase – not just monthly payments. Other factors to consider when making the budget include insurance, gas, routine maintenance, etc.
- Typically, three negotiations occur when purchasing a vehicle – the cost of the car, the finance rate, and the trade-in value. Keep each transaction/negotiation separate from the other.
In the most recent analysis, AAA evaluated nine categories of vehicles – consisting of 45 models – to determine a new vehicle’s average annual operating and ownership costs. AAA selects top-selling, mid-priced models and compares them across six categories: fuel, maintenance/repair/tire costs, insurance, license/registration/taxes, depreciation, and finance charges. The study assumes a five-year ownership period, with the vehicle being driven 15,000 miles/annually (or a total of 75,000 miles).
For this year’s study, fuel costs were projected based on a weighted average of the first five months of 2022. During that time, fuel prices averaged 17.99 cents per mile or $3.999 per gallon. Gas prices have seen a dramatic climb since early March, and, as a result, the cost of vehicle ownership has increased accordingly since the Your Driving Costs evaluation was completed.
Because of the high variability of fuel costs, consumers are considering alternative ways to budget for the cost of vehicle ownership. One way they do this is by exploring electric vehicles as an option for their next car purchase. In fact, a recent AAA consumer survey found the main factor behind Americans’ desire to buy an electric vehicle is to save on fuel costs.
Calculate annual driving costs through the new AAA Your Driving Cost calculator. Visit AAA Newsroom and discover several resources consumers can use while car shopping, including the AAA Car Guide and AAA’s car buying program.