Finally, some good news for car shoppers: new vehicle costs dropped this year, according to AAA.
The annual cost to own and operate a new vehicle fell to $11,577, or $964.78 per month, a $719 decline from 2024, the nonprofit federation of motor clubs said in its annual Your Driving Cost (YDC) study. Slower depreciation, lower finance charges, reduced fuel prices, and a shift towards more affordable vehicle options contributed to the decline, AAA said.
Since 2019, before the pandemic, new vehicle prices alone are up 22% and insurance is up 56%, according to inflation data from the Bureau of Labor Statistics. Add in higher labor costs and more expensive auto parts, and it hasn’t felt like a good time to buy a car in a while.
But take a pause.
“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, but it’s still important to do the math over time.
It’s a little better time to buy a car compared to recent years, but “consumers should factor in all the expenses involved before making any commitments,” Brannon said.
For instance, they need to consider carefully their transportation needs. While a pickup truck is ideal for heavy-duty hauling and towing, it averages an additional $6,402, or 43.3%, per year compared to a small sedan.
To help determine how much different cars would cost to own, try AAA’s Your Driving Costs calculator. It’s a customizable digital tool that offers cost analyses for specific vehicles by category, new and used, up to five model years back.
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Electric vehicles are no longer less expensive to own than gas-powered cars, AAA said. Fuel price differences drove the flip, it said.
Electricity prices for charging EVs rose slightly to $0.167 per kilowatt hour from $0.159 in 2024, while average gas prices fell 12.8% to $0.13 per mile.
“Although EVs still offer fuel savings—less than half of gas vehicle costs—this does not sufficiently offset their higher ownership costs,” AAA said in a release. “Consequently, EVs are now more expensive overall across all vehicle categories in this study.”
Depreciation – The difference between a car’s purchase price and its resale value is the most significant cost of vehicle ownership. This year, depreciation lost an average of $4,334 in value per year compared to $4,680 annually in 2024.  Part of the drop is attributed to expectations for resale values to rise as new vehicle prices increase partly due to tariffs.
Finance Charges – Estimated finance costs fell 15% to $1,131 in 2025 from $1,332 in 2024.  This was partly due to new vehicles with lower sticker prices in this year’s survey, AAA noted.
Fuel Prices – The average fuel cost dropped 12.8% from last year to $0.13 per mile. Regular grade gasoline for vehicles in the study averaged $3.151 per gallon, down from $3.539. Meanwhile, electricity prices for charging electric vehicles rose slightly to $0.167 per kilowatt hour from $0.159 in 2024.
No one knows, said Austin Shivers, AAA automotive engineer.
“So many things can change in a year- fuel prices, interest rates,” he said. “If someone could predict that, they’d make a lot of money.”
The best advice AAA has for car buyers is:
Medora Lee is a money, markets, and personal finance reporter at USA TODAY. You can reach her at mjlee@usatoday.com and subscribe to our free Daily Money newsletter for personal finance tips and business news every Monday through Friday.

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