AAA’s annual driving cost analysis shows a $719 decline in ownership expenses.
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For over 70 years, AAA’s Your Driving Costs analysis has offered valuable insights into vehicle ownership expenses. This year’s analysis shows that the total cost of owning and operating a new vehicle is $11,577, or $964.78 per month, a $719 decline from 2024.
Factors contributing to this decline include depreciation, lower finance charges, reduced fuel prices, and a shift towards more affordable vehicle options. AAA advises potential buyers to consider these costs to choose the best vehicle type and model for their budget.
“While you may want to rush to the dealership for a new car when you see the drop in ownership costs this year, there are many factors to consider,” said Jim Garrity, director of public affairs, AAA East Central. “Consumers should assess their vehicle needs first, taking into consideration things like miles driven, hauling or towing needs, and most importantly, their budget.”
Depreciation, which is the difference between a car’s purchase price and its resale value, is the most significant cost of vehicle ownership. This year, depreciation has decreased, with vehicles in the YDC study losing an average of $4,334 in value per year compared to $4,680 annually in 2024.
Categories driving lower costs this year include:
The Right Vehicle – Your Budget
Choosing the right vehicle is important, as it can lead to significant savings over time. For example, while a pickup truck is ideal for heavy-duty hauling and towing, it comes at a steep cost, averaging an additional $6,402 per year compared to a small sedan, which operates at just 55.87 cents per mile—43.3 percent less than a pickup. This comparison highlights the importance of selecting a vehicle based on actual transportation needs.
Similarly, according to this year’s AAA EV survey, consumers are increasingly drawn to electric vehicles (EVs) for their gas savings and lower maintenance costs, with EVs having the second-lowest maintenance expenses among all vehicle categories. Hybrid options are also appealing, offering the lowest maintenance fees while sharing similar lower fuel cost benefits, even considering the national average electricity price of 16.7 cents per kilowatt-hour (kWh). Ultimately, whether opting for a pickup, a small sedan, or an EV, weighing these factors carefully to make a well-budgeted decision can lead to ownership savings.
Comparison of EV and Hybrid Ownership Costs to Gas-Powered
The primary factor affecting the cost differences between electric vehicles (EVs) and gas vehicles this year is fuel prices. While EVs remain more expensive in “ownership costs” (depreciation, insurance, fees, and financing), they have lower “operating costs,” particularly in fuel and maintenance. Last year, EV fuel costs were about one-third of gas vehicle costs.
This year, however, gasoline prices have significantly decreased, while electricity prices have slightly increased. Although EVs still offer fuel savings—less than half of gas vehicle costs—this does not sufficiently offset their higher ownership costs. Consequently, EVs are now more expensive overall across all vehicle categories in this study.
AAA continues to expand YDC by comparing top-selling EV and Hybrid models in four popular vehicle categories — medium sedan, compact SUV, medium SUV, and pickup truck. Over the years, automakers have expanded their lineups to include more appealing categories and popular models. Now, with this bonus analysis, consumers have a snapshot of ownership costs for select EV and Hybrid models compared to their gas-powered counterparts.
*Please note: Not all categories and models are available for analysis and cannot be directly compared to the average ownership total. Refer to the methodology for additional background.
Car Buying Advice
Create a monthly or annual budget and factor in ownership and operating costs before making a purchase.
Keep each transaction and negotiation separate from the other – the cost of the car, the finance rate, and the trade-in value.
Obtain pre-approval from a financial institution (e.g., Bank, Credit Union, AAA, etc.) before discussing finance rates with the car dealer to ensure the best lending rate is available.
There are quite a few options (online and in-store) available to consumers when considering where to buy a used vehicle besides a dealership. Visit a AAA branch, which may offer discounts for members.
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