Price comparison website: Owning a car in the U.S. costs an average of $5,851 per year
When buying a car, many people focus only on the purchase price and monthly payments, but these represent just the beginning of the total cost of ownership. A recent study by the insurance comparison site Insurify, as reported by CNBC, reveals that the average annual cost of owning a car in the U.S. is nearly $6,000. Comprehensive auto insurance accounts for the largest share of this expense—a figure that excludes monthly loan repayments—while steadily rising gasoline prices have also significantly driven up ownership costs.
Insurify’s research indicates that the average annual cost of car ownership in the U.S. is $5,851. Comprehensive insurance is the biggest expense at an average of $2,237 per year, followed by $2,126 for gasoline and $1,488 for maintenance and repairs. This analysis is based on Insurify’s insurance quote data and estimates from the American Automobile Association (AAA) regarding fuel and maintenance costs.
However, this total does not include monthly loan payments. Credit reporting agency Experian notes that in the second quarter, the average monthly payment was $765 for a new car and $542 for a used car.
Automotive pricing and research firm Kelley Blue Book reports that the average price of a new car in July was $49,855. Meanwhile, market research firm Cox Automotive notes that the average price of a used car in July was $27,028. These figures represent increases of 34% and 29%, respectively, compared to July 2019; for context, the overall inflation rate since July 2019 has been approximately 30%.
Data from the Bureau of Labor Statistics through July of this year shows that auto insurance costs have risen by about 50% since July 2019. Julia Taliesin, an economic analyst at Insurify, explains that rising repair costs driven by inflation are a contributing factor to higher premiums. Advances in automotive technology also play a role; new vehicles are equipped with increasingly complex electronic systems that drive up repair costs. Higher repair costs lead to larger insurance claims, and insurance companies factor these expenses into their premium rates. Karl Brauer, a senior analyst at the used-car research site iSeeCars, advises that whether purchasing a new or used vehicle, it is essential to understand insurance costs beforehand. Experts note that premiums vary not only based on the specific vehicle but also depending on the owner’s place of residence and driving record. In some states, insurance companies may be permitted to incorporate credit-based insurance scores into their pricing models; a lower score can result in higher premiums.
Rising gasoline prices have also increased the cost of vehicle ownership. Data from AAA indicates that as of September 11, the average price of a gallon of regular unleaded gasoline was $4.29—a 56% increase from the average of $2.75 per gallon in July 2019—while the price of diesel reached a record high of $6.05 per gallon.