We Americans sure do love the freedom of owning our own automobile, but the price of that freedom is climbing. AAA has released its 62nd annual "Your Driving Costs" study, which shows a 1.9-percent year-over-year increase in the cost of auto ownership. That's an average of $8,946 per year per car, with costs including monthly payment, fuel, maintenance and insurance.

Given the sharp rise in the cost of a gallon of petrol, it's no surprise that prices at the pump are up 14.8 percent, or an average of 14.2 cents per mile. Tire prices are up 4.2 percent, in part because material prices have skyrocketed. The average insurance policy jumped by $33 versus 2010 numbers, with an average rate of $1,001 per year.

Interestingly, used cars are worth more than they were a year ago, with a depreciation drop of 4.9 percent, which means a new car purchase may hold its value a little better than before.

If $8,946 is too rich for your blood, AAA shows that the best bet could be a smaller sedan. Compact models average $6,735 per vehicle, while 4WD SUVs top the charts at $11,360. Large sedans are close to the SUV numbers, with an average of $11,324. AAA based its findings on a driving cycle of 15,000 miles per year. Scroll down below to read the AAA press release.
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ORLANDO, Fla., April 27, 2012 /PRNewswire-USNewswire/ -- AAA released the results of its annual 'Your Driving Costs' study today revealing a 1.9 percent rise in the yearly costs to own and operate a sedan in the U.S. The average costs rose 1.1 cents per mile to 59.6 cents per mile, or $8,946 per year, based upon 15,000 miles of annual driving.

"The average driving cost for 2012 is up due to relatively large increases in fuel and tire costs, and more moderate increases in other areas," said John Nielsen, AAA director of Automotive Engineering and Repair. "Those increases were offset by a decrease in depreciation resulting in an overall increase of 1.9 percent."

In-depth findings of this year's study, including a breakdown of specific costs by category of vehicle and various annual mileages, are contained in the 'Your Driving Costs' brochure which is available at select local AAA branch offices or may be downloaded at the AAA Newsroom.

"Some driving costs fluctuate at different times during the year, such as what we have experienced with fuel prices since the middle of February," explained Nielsen. "However, AAA's use of a consistent methodology for its study allows an accurate comparison of driving costs from year to year, and the figures can reliably be used to compare different categories of vehicles."

Nielsen continued, "AAA understands that high fuel prices are a real concern for consumers, and those in the market for a new vehicle may want to be cautious and determine projected operational costs based on varying levels of fuels costs. To assist consumers in determining their individual driving costs, the AAA 'Your Driving Costs' brochure contains a worksheet that can be filled out and personalized for a specific area, driver and vehicle.

Fuel Costs Up 14.8 Percent
The cost of fuel had the largest percentage increase from 2011 to 2012, rising 14.8 percent to 14.2 cents per mile on average for sedan owners. The average cost of regular grade fuel (used by most of the study vehicles) rose 16.6 percent, from $2.880 to $3.357 per gallon. Several vehicles included in the 'Your Driving Costs' study had increases in fuel economy, resulting in the overall average fuel cost increase being slightly less. The fuel costs in the 2012 study were calculated using the national average price for regular, unleaded gasoline during the fourth quarter of 2011.

Tire Costs Up 4.2 Percent
The cost of tires ranks second highest among the factors that rose from 2011 to 2012, increasing by 4.2 percent to one cent per mile on average for sedan owners. The rise in cost can be attributed to higher costs for natural rubber, and the increased cost of oil used in tire production and transportation from factory to distributors across the country. A collateral factor is a trend for manufactures to equip new cars with premium-grade tires rather than mid-grade tires.

Depreciation Drops 4.9 Percent
Depreciation costs were up slightly in 2011, but for 2012 the trend has reversed with depreciation falling across the board by nearly five percent. This change may be a consequence of reduced new car sales over the past few years, which has resulted in a relative shortage of good used cars on the market, driving up their value. This is good news for those in the resale market as their vehicles will retain a greater portion of their purchase cost.

Maintenance Costs Up 0.7 Percent
Maintenance costs are slightly higher in the 2012 'Your Driving Costs' study with an increase of 0.7 percent to 4.47 cents per mile on average for sedans. Factors contributing to the increase include higher prices for oil and more manufacturers now requiring synthetic or synthetic-blend motor oils. Although the use of these oils often comes with extended service intervals, the higher cost of the oil combined with increased maintenance operations at each service (which adds to the time required) can combine to increase overall vehicle maintenance costs.

Insurance Costs Up 3.4 Percent
Average insurance costs for sedans rose 3.4 percent (or $33) to $1001 yearly. Insurance rates vary widely by driver and driving record, issuing company and geographical region. AAA insurance cost estimates are based on a low-risk driver with a clean driving record. For 2012, this group saw a small increase that offset a decrease experienced in 2011. Quotes from five AAA clubs and insurance companies representing seven states showed across the board increases for all sedan sizes, with large cars having the biggest increase.

62nd Year of 'Your Driving Costs' Study
AAA has published 'Your Driving Costs' since 1950. That year, driving a car 10,000 miles per year cost 9 cents per mile, and gasoline sold for 27 cents per gallon.

Driving Costs are also affected by how well your vehicle runs. Performing regular maintenance not only ensures fuel-efficient operation but can help prevent costly vehicle repairs that can add to your total ownership cost. For more information on ways to keep your vehicle in top condition read the owner's manual and visit AAA.com for vehicle care information, automated maintenance reminders and repair facility locator tools.

The 'Your Driving Costs' study analyzes the cost to own and operate a vehicle in the U.S. Variable operating costs considered in the study include fuel, maintenance and tires. Fuel costs are based on $3.357 per gallon (average price of gas for October 2011-December 2011/AAA Fuel Gauge Report) and Environmental Protection Agency fuel-economy ratings weighted 60 percent city, 40 percent highway driving. Fixed ownership costs factored into the results include insurance, license and registration fees, taxes, depreciation and finance charges. These ownership costs are assumed to be on a purchase of a new vehicle, depreciated over five years. Finance charges are based on five year loan at six percent interest with a 10 percent down payment. Your actual operating costs may vary. Refer to page three of AAA's 2012 'Your Driving Costs' brochure for a list of vehicles and assumptions used in the study.

To conduct its study, AAA's auto buying and repair experts compiled detailed driving costs for small, medium, and large sedans. Driving costs in each category are based on the average costs for five top-selling models selected by AAA. By size category, they are:

Small Sedan – Chevrolet Cruze, Ford Focus, Honda Civic, Nissan Sentra and Toyota Corolla.

Medium Sedan – Chevrolet Impala, Ford Fusion, Honda Accord, Nissan Altima and Toyota Camry.

Large Sedan – Buick Lucerne, Chrysler 300, Ford Taurus, Nissan Maxima and Toyota Avalon.

Though not part of the AAA composite average, SUV and minivan information is also included in 'Your Driving Costs' to help buyers estimate operating costs for these types of vehicles. Selected models include:

SUVs – Chevrolet Traverse, Ford Explorer, Jeep Grand Cherokee, Nissan Pathfinder and Toyota 4Runner.

Minivans – Dodge Grand Caravan, Kia Sedona, Honda Odyssey, Nissan Quest and Toyota Sienna.

As North America's largest motoring and leisure travel organization, AAA provides more than 53 million members with travel, insurance, financial and automotive-related services. Since its founding in 1902, the not-for-profit, fully tax-paying AAA has been a leader and advocate for the safety and security of all travelers. AAA clubs can be visited on the Internet at AAA.com.


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  • 56 Comments
      Polly Prissy Pants
      • 2 Years Ago
      So what would you do with an extra $9000 every year? It was that realization that finally put me off expensive cars. And they wonder why 20-somethings don't want to drive...
      KAG
      • 2 Years Ago
      Could you imagine the cost of people living in and working in big cities like New York and San Fran that pay up to $500 a month for parking garages and have to pay to park anywhere.
        brian
        • 2 Years Ago
        @KAG
        It would cost me $3000/year to just park a car at home here in SF - That's before parking it anywhere in the city I might want to go, insuring it, fueling it or paying for it. So glad I got rid of my car years ago - I sure do enjoy my annual vacations to the Caribbean...
          UH2L
          • 2 Years Ago
          @brian
          Or you can live in one of the many fine medium sized cities in the Midwest, pay $1,000 in rent for a nice place, less for gas, nothing for parking, less for insurance, drive the vehicle without constantly being in traffic jams so you can actually enjoy driving the vehicle... and take annual vacations to the Caribbean or wherever else you want... and visit San Fran once in a while... and save for retirement. I refuse to live in a city that's not car-friendly.
        mikemaj82
        • 2 Years Ago
        @KAG
        uhh, their salaries reflect that. trust me.
      mikeybyte1
      • 2 Years Ago
      Are they assuming everyone has a monthly car payment forever? I would be curious to know what the cost is without the monthly payment. Plenty of people keep cars once they are paid for. Several that I know will simply drive them into the ground and drive them for over a decade. Then go buy a cheap used one and do it all over again.
        BG
        • 2 Years Ago
        @mikeybyte1
        My wife and I live in Mississippi, a poor state. And we know many people here who DO perpetually have a car payment. It amazes us. Any many of them say life is so expensive, they can't save anything, etc.
        Jake
        • 2 Years Ago
        @mikeybyte1
        I hear that some weirdos actually pay cash for a car.
          jtav2002
          • 2 Years Ago
          @Jake
          I am one of those weirdos. And, yes it's assuming you have a car payment. It's only an average number, obviously it doesn't apply to everyone. Me personally my cost of ownership for my truck is probably at the most $3k a year, and likely less.
          michigan
          • 2 Years Ago
          @Jake
          I'm happy to be a weirdo then, and hopefully I'll stay that way
        icemilkcoffee
        • 2 Years Ago
        @mikeybyte1
        Actually car payments are not a huge factor. Nowadays the interest rate is so low- 0.9% and 1.9% are common- car payments is not the problem that some people make it out to be.
      AZTrafEng
      • 2 Years Ago
      The biggest cost is car payments, its amazing people who will stretch out the payments over any longer than 3 years just to afford a better car. If you don't have it right now, save for it, otherwise the interest will bring you down. With the sales tax around here sitting about 9% for cars it makes it more ridiculous to even buy reasonable cars sometimes. For me getting 22 mpg overall, I use about 550 gallons. Lets say 4 dollars to 5 dollars a gallon for any future possibilities there and you've got $2,200-$2,750 in gas. Insurance is only about $1,200 a year. These are fixed costs and won't change regardless of the condition of my car or if I flat out own it or not. Even if I factor in $2000 a year in maintenance once car payments are up I'm still well below that average cost. With the average cost of a new car being 30k, even with a 5k trade in you're still looking at payments around $500 a month over 60 months. $6000 a year in payments, just payments, and this is an average case! Imagine those paying for M3's or Escalade's racking up $1000+ a month over 60 months. Car ownership is a depressing necessity sometimes, but at least if you get a car that can put a grin on your face every once in awhile it takes away some of the pain.
        mikemaj82
        • 2 Years Ago
        @AZTrafEng
        if you're paying over $350 / month for a car you're an idiot. there's no need for it. save up before you buy. put as much down as you can, pay cash. Do anything but commit to that much money per month taken out of your wallet.
      ilmhmtu
      • 2 Years Ago
      $9000/year?!? Ouch. I think I can hear my checkbook crying.
      JF
      • 2 Years Ago
      It's depressing how much money we invest in depreciating assets and transportation. Really makes me re-think my priorities... ..ok I thought about it; I still want my gas-guzzling AWD family wagon :)
        JF
        • 2 Years Ago
        @JF
        Just did the math... my yearly cost is 5 grand (CAD) for an '06 Legacy wagon for everything that relates to the car. It's a new-to-me used car so I've just started paying for it, unfortunately there are some interests in that amount, but at least most of the depreciation damage is already done (6 year old car). When you factor in payment, insurance, fuel and maintenance/repair it really does climb fast. I'm glad we have just one family car that does everything, the cost of owning several cars would get out of control real fast...
      Mulad
      • 2 Years Ago
      I generally think that the AAA's estimates for this are high, though it's certainly within the realm of what many people actually pay. One problem with their methodology is that they assume that a person buys a new car every 5 years, which isn't really reflective of our whole society. Lots of people rely on used cars, which saves a lot of money (though even a car bought for $1 will cost a few thousand a year because of insurance, maintenance, fuel, and parking). But even if the direct cost of a car isn't quite that high, the societal cost almost certainly is. Deaths and injuries bring huge costs, and the amount of land (and property value) wasted by garages and parking lots is ridiculous.
      FunkyBanana
      • 2 Years Ago
      If one is paying $8K a year, a Volt lease seems to make lots of sense. For instance leasing a Volt. $2500 down payment $350 a month for 36 month or $12,600 15K miles a year (80% electric/20%gas) EST Electric cost .02 per mile EST Gas costs .09 per mile. Total Fuel Cost (36 months) = $1530 9 oil changes @ $50 each = $450 Depreciation = $0 Insurance = $1,200 per year Total 3yr cost = $20,680 or $6,893 per year My car = 2004 SAAB 9-5 Linear Wagon Purchase price $8,000 12k miles per year @ .11 per mile = $1320 per year AVG Maint per Year = $2,000 (repairs are expensive) Insurance = $700 year (full coverage) Residual value if sold = $2000 (safe est) 3yr TCO = $16740 or $5,580 per year 5yr TCO = $26100 or $5,220 per year So this is comparing a brand new car against my economical choice and the savings is only about $2K per year. The numbers can be made to better favor the new car by picking a less expensive lease option. I was surprised to see how little the difference is, not that $2k isnt a nice savings, but I thought it would be higher.
        FunkyBanana
        • 2 Years Ago
        @FunkyBanana
        Now compare a Volt lease to the purchase of a $30000 car with good MPG Purchase Price = $30,000 Ownership period = 10 years Miles Driven = 120,000 (12,000 per year) Maint Cost = $4,000 (400 per year) Residual value after 10 years = $10,000 Insurance = 12,000 (1,200 per year) (30K + 120K + 4k +12K) – 10K = TCO for 10yrs of ownership $56,000 or $5,600 per year This assumes no major repairs and fuel prices remaining constant. The Volt is more expensive but you can drive a new car every year for about 2k more per year ($20k over ten years). If GM can get the lease down to about $250 per month the Volt will be very attractive as a lease.
          Stew
          • 2 Years Ago
          @FunkyBanana
          Your residual value of 33% after 10 years seems a bit optimistic. http://mediaroom.kbb.com/kelley-blue-book-releases-2012-residual-value-analysis, kbb expects cars to hold to 35.5% of their residual value after 5 years. I doubt that they would only lose another 2% in the other 5. I would guess that the 10yr value would be around 15%, or about half of what you have on your estimate.
          FunkyBanana
          • 2 Years Ago
          @FunkyBanana
          Oops I forgot fuel in my example above. Lets consider .09 per mile for 120000 miles so another $10,800 get added to the TCO model. So it should be $66,800 or $6,680 per year vs. $6,893 per year for the Volt.
      Random Guy
      • 2 Years Ago
      THis is depressing...I actually thought it was a lot lower than this...and the price I was thinking was still way to high.
        Relyat08
        • 2 Years Ago
        @Random Guy
        Same, I had no idea I was spending that much. The $9,000 I'm spending is close to 25% of my income. That sucks! :(
          kingrat001
          • 2 Years Ago
          @Relyat08
          It was higher than I thought too. I added mine up and it's about $7700 a year. Not horrible, but higher than I thought it would be.
      jbserra
      • 2 Years Ago
      Based on this article, I can fully justify buying a Gen I or Gen II SHO every year for the rest of my life.
      canuckcharlie
      • 2 Years Ago
      I still feel that insurance is a scam. It's a large chunk of money I spent that I neither get back in some form of product or service.
        benjammin
        • 2 Years Ago
        @canuckcharlie
        You could always drive your car into a building or something. Then you might get some return on your insurance
        michigan
        • 2 Years Ago
        @canuckcharlie
        I agree. It's a necessary evil
        canuckcharlie
        • 2 Years Ago
        @canuckcharlie
        Does it make sense when insurance cost about the same as car payments? How often do I get into accidents? Does your insurance premium go up if you make a claim? At the end, you loose.
          Nemebean
          • 2 Years Ago
          @canuckcharlie
          Unless you have an accident where major medical bills are involved. That's why insurance costs what it does - not because of the relatively trivial cost of repairing your car.
        regionrat
        • 2 Years Ago
        @canuckcharlie
        canuckcharlie - You must be a real tightwad if you don't think blanket peace-of-mind coverage has value.
        kingrat001
        • 2 Years Ago
        @canuckcharlie
        LOL. You sound like the neighbors of mine who thought the same way. They didn't have car insurance, or even house insurance. They had paid off the house long ago, retired at 62, and thought they were all set. Then one day, they went out to dinner, and the house burned up. Total loss. And their new car, just paid for in cash, it went up in flames too. The ONLY things they had left was the husband's kind of ratty 1994 Chevy Caprice, and what they were wearing. Almost 5 years later, they are still sitting in the empty lot most days, in the Caprice, saving up to rebuild the house. They have no credit, "We never thought we would need it!", so they can't (actually won't due to they refuse to pay "All that" interest) get a loan to start building the new place. I saw some construction company truck in their driveway last week, so maybe they have finally got the bucks saved up to do it. That few hundred bucks a year that they would have paid for the house insurance would have been money well spent. When I was hurt in a wreck back in 2003, the money I paid for insurance was well spent. Between the repairs to my truck, my medical bills, and rental car, my glasses, and a check just for the hassles I had getting the truck fixed, they spent about $30000. Not only did I eventually get my deductible back, my rates didn't go up a dime, because the black box in my truck, along with witnesses, showed I wasn't at fault and the wreck was totally unavoidable on my part. My insurance rates have actually gone down with each of the last 3 vehicles I have purchased since then!
        Carbon Fibre
        • 2 Years Ago
        @canuckcharlie
        I agree and why the hell are you downranked?
      Go
      • 2 Years Ago
      Only idiots (and kids without a hint of savings) replace perfectly good car with new ones and make payments on depreciating assets. If you can't buy it cash and hold onto it, you should be buying a scooter. Exhibit "A" is the number above. Between my three cars -- purchased after depreciation -- my total cost for the year (insurance, gas, repairs, maintenance AND depreciation: Six grand). That's for a classic that gets 2000 miles a year (bought for $5000) a sportwagon that gets 8000 miles a year (bought for $18,000) and a sports/track car that gets 3000 miles (bought for $5000). With so many people living on the bubble, spending $7-9000k a year is the dumbest thing I've ever heard. Wise up America -- This ain't sustainable.
        jtav2002
        • 2 Years Ago
        @Go
        While I was fortunate enough to be able to pay cash for my new Tacoma a few years ago, I have no problem with having to have a payment, it's the ridiculous payments that make it unsustainable. If you can get a cheaper car, or have a solid down payment to give you reasonable payments, that's fine. It's when people have $500 a month payments on vehicles that are relatively unexpected that's nuts.
          Greg
          • 2 Years Ago
          @jtav2002
          No, it isn't unreasonable payments that's the problem. The problem is people don't keep their cars long enough to have a period of time without a payment. For example, buy a car for $20k and - trade it in after 3 yr for $10k = $3.3k / yr - get rid of it after 10 yr for $0 = $2k / yr - get rid of it after 15 yr for $0 = $1.3k / yr In the last two scenarios, if you keep paying the car note (to yourself, not the bank), when it is time to get a new car, you have enough for a new one without a loan. For the last scenario, you have enough for a much nicer car. The secret is to take care of what you have; fix problems when they are cheap instead of waiting for them to get expensive.
          BG
          • 2 Years Ago
          @jtav2002
          Well stated, all of you. Also, it has been demonstrated time and time again that paying for almost any car repairs (except crashed vehicles or other massive issues) is much cheaper long-term than to pay for buying a new vehicle. Cars don't "nickle and dime you to death" unless you really neglected them (but I realize, once in awhile, there is a real dud car).
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