New Vehicles Costing Americans Additional $706 a Month

AAA study shows pickups have highest costs.

by on Aug.23, 2017

A new AAA study shows that pickup trucks have the highest level of additional costs.

More and more often new vehicle buyers are shopping for a specific payment, whether that’s a through a lease or a loan. However, owners can add more than another $700 monthly to the costs of their vehicles, according to a new study.

AAA’s Your Driving Costs report reveals that is costs an average of $706 each month, or $8,469 annually, to operate a new vehicle in 2017.

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Small sedans are the least expensive vehicles to drive at $6,354 annually, however, small SUVs ($7,606), hybrids ($7,687) and electric vehicles ($8,439) all offer lower-than-average driving costs to U.S. drivers.

Trucks top the list of the nine categories included in the evaluation at $10,054 annually.

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“Determining the cost of a new vehicle car is more than calculating a monthly payment,” cautioned John Nielsen, AAA’s managing director of Automotive Engineering and Repair.

“While sales price is certainly a factor, depreciation, maintenance, repair and fuel costs should be equally important considerations for anyone in the market for a new vehicle.”

Electric vehicles depreciate at a rate of $6,000 annually, according to AAA.

To estimate the overall cost to own and operate a new vehicle, AAA evaluated 45 2017 model-year vehicles across nine categories, focusing on mid-range, top-selling vehicles. AAA’s annual driving cost is based on a sales-weighted average of the individual costs for all of the vehicle types.

There are several factors that make up the average monthly cost, including depreciation, maintenance and repair and fuel. Depreciation is the biggest, and most often overlooked, expense associated with purchasing a new car, AAA notes.

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New vehicles lose an average of $15,000 in value during the first five years of ownership. In 2017, small sedans ($2,114) and small SUVs ($2,840) have the lowest annual depreciation costs, while minivans ($3,839) and electric vehicles ($5,704) are at the high end of the scale.

AAA used factory-recommended maintenance, replacement tires, extended warranty costs and services associated with typical wear-and-tear to determine maintenance and repair costs. New vehicles, on average, will cost a driver $1,186 per year to maintain and repair.

Fuel costs are difficult track since they differ widely depending upon the type of vehicle, ranging from 3.68 cents per mile (electric vehicles) to 13.88 cents per mile (pickup trucks). New vehicle owners, on average, will spend just over 10 cents per mile – about $1,500 annually – to fuel their vehicles.

Simply looking at the cost categories, one might assume that EVs would top AAA’s driving cost lists. They do top two categories: maintenance and repair at $982 annually and fuel costs at just 4 cents per mile. However, once you drive an EV off the lot, it’s value drops like a stone. These vehicles lose an average of nearly $6,000 in value every year.

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“Although electric vehicles can have higher up-front costs, lower fuel and maintenance costs make them a surprisingly affordable choice in the long run,” said Nielsen. “For even lower costs, car shoppers can avoid high depreciation costs by selecting a used electric vehicle.”

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2 Responses to “New Vehicles Costing Americans Additional $706 a Month”

  1. Mike says:

    They did not include cost of insurance. The premium of my 2017 Subaru Forester was about $900/year, and that was cheap compared to other companies and parts of the country.

  2. DrDT says:

    One of the reasons the PEVs drop in value is that the $7500 tax credit ( any state incentives) is only for the purchase of a new vehicle. It would be more accurate to do the calculation for PEVs with and without this taken into account. $7500/5 is $1500 each year. It will be interesting to see how these numbers change as the PEV Fed tax credits expire, PEV MSRPs become more close to comparable conventional vehicle MSRPs, and the battery technology matures. Also, I suspect that those depreciation rates are skewed by the LEAF and Volt.
    I bet a Tesla Model S has a better depreciation rate than an S-Class, BMW-7, or Audi A7/A8

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