New cars are getting more expensive, auto loan debt is at record highs, and even vehicle repossessions are sky-high. There is good news, though. The total cost of owning that car for the year will be less than it was last year, and the difference is significant. A new analysis says that the cost of owning a car this year is $719 lower than it was in 2024.
For the last 70 years, the AAA has been completing what it calls the Your Driving Costs analysis. 2025 definitely won’t be the cheapest, but the decline is significant, and it should be enough for owners to notice.
AAA says that the total average cost of owning and operating a new car in 2025 is $11,577. That’s down $719 from last year, which is almost a whole month’s worth of operating costs back in your pocket. According to the report, it isn’t one area that is driving the decline but smaller improvements almost everywhere. Some of the savings, ironically enough, even come from higher car prices.
Finance charges have dropped this year by 15%. That brings loan costs down to $1,131 versus the $1,332 last year, as buyers are paying less interest on their vehicle loans.
Fuel prices are also down. The average fuel cost, AAA says, is 12.8% lower than last year. The new average cost is 13 cents per mile, as average fuel prices have fallen in the analysis from $3.53 to $3.15. Electric car charging costs, however, are up slightly. The cost has climbed from 15.9 cents per kilowatt-hour to 16.7 this year.
Vehicle depreciation is also improved. It’s the most significant expense, at an average expense of $4,334 for 2025. That’s more than $300 per year less than last year, though, when it was $4,680. Average insurance costs were down slightly, falling $21 to $1,694 versus last year for the study’s typical driver. Maintenance and repair costs, including tires, were up about a penny per mile to 11.04 related to increased parts costs.
Licence and registration fees stayed flat. The average there, including government taxes, fell $2.00 to $813 per year.
AAA warns not to rush to buy a new model just because ownership costs are down. “It might be tempting to rush to the dealer for a new car when you notice a drop in ownership costs this year,” said Greg Brannon, AAA’s director of automotive research. “However, consumers should factor in all the expenses involved before making any commitments.”
If you want to reduce your costs even more, AAA recommends buying the right-sized vehicle. Getting a pickup, for example, when you only need a small car, is costing you an extra $6,402 every year. A sedan will cost you 56 cents per mile, while a subcompact SUV brings that to 66 cents. A medium SUV takes it up to 84 cents.
As you might expect, hybrid models have the lowest cost for fuel. EVs are obviously even better, but electrons don’t count the same as liquid fuel. Hybrids are also the third lowest for maintenance costs and depreciation. Electric vehicles cost the least for maintenance, fuel/charging, and repairs. However, the average operating cost is brought up to 71 cents per mile thanks to higher than typical depreciation.
Source: AAA
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