Costs of Vehicle Ownership on the Rise, AAA Reports
YOUNGSTOWN, Ohio – The true cost of automobile ownership is on the rise, according to a report by AAA, driven largely by financing and fuel costs.
Year-over-year, the average annual cost of owning a new vehicle jumped 24% to $9,282, the largest increase since the association began tracking data in 1950.
Finance charges rose to an average of $920, up from $744 last year, as federal interest rates have risen. As longer terms have become more common – the AAA report specifically noted 72-month terms – so too has the amount vehicle owners are paying; every 12 months added to the life of the loan adds about $1,000 in total charges.
Depreciation is the largest cost of vehicle ownership, representing 36% of total costs, according to AAA. The average vehicle saw an average decrease of $3,334 in value. For small- and medium-sized sedans, depreciation costs decline.
Average fuel costs rose 5% to 11.6 cents per mile, an increase driven by an increase in gas prices, which are up 15.6 cents per gallon compared to the same time last year. For electric-powered vehicles, charging costs increased 0.1 cent per kilowatt hour.
Maintenance costs, meanwhile, rose 8.94 cents per mile driven, an 8.9% increase from 2018. The cost of licenses, registration fees and taxes was up 1.9% to a national average of $753. Driving much of the increase was increasingly complex electronics systems.
Small sedans remained the cheapest vehicles in terms of average annual costs, coming in at $7,114, while pickups were the most expensive at $10,839.
Copyright 2023 The Business Journal, Youngstown, Ohio.