Inflation Sends Car Ownership Costs Soaring to Over $10,000 a Year: AAA
By: Katabella Roberts
August 18, 2022: Owning and operating a new car has become increasingly more expensive over the last year, driven predominantly by inflation and rising fuel prices, according to the American Automobile Association’s (AAA’s) annual “Your Driving Costs” report.
The overall average cost to own and operate a new car in 2022 is $10,728 on an annual basis, or $894 per month, marking a considerable increase from 2021 when owning a new car cost $9,666 annually, or $805.50 per month, according to AAA.
That marks a nearly 11 percent increase from last year.
AAA’s report (pdf) looked at 45 models in nine vehicle categories to come up with the average annual cost of owning and operating a new vehicle.
AAA selects top-selling, mid-priced models and compares them across six categories: fuel, maintenance and repair and tire costs, insurance, license/registration/taxes, depreciation, and finance charges.
The study, which does not account for used car prices, assumes a five-year ownership period, with the vehicle being driven 15,000 miles annually, or a total of 75,000 miles. It found that it would cost drivers of gas-powered vehicles approximately $2,700 a year to fuel up, while owners of electric vehicles that charge at home would need around $600 a year to charge that vehicle to cover the same distance, marking a difference of $2,100 annually.
Fuel costs in the study were projected based on a weighted average of the first five months of this year, during which time they cost drivers about 17.99 cents per mile or $3.999 per gallon.
‘Purchase Price Not the Whole Story’
However, gas prices have drastically increased since early March, in part because of Russia’s invasion of Ukraine and the ongoing supply chain crisis, meaning Americans are now having to splash out more if they want to own a vehicle. AAA noted that the cost of vehicle ownership has increased accordingly since its Your Driving Costs evaluation was completed.
As of Aug. 18, the national average price for gasoline was $3.94 per gallon, up more than $1 per gallon compared with August 2019 and 2020, albeit much lower than the $5 per gallon prices seen in June.
“You’re usually focused on the purchase price and that is not the whole story. Not even close,” Greg Brannon, director of automotive engineering for AAA, told USA Today. “I think [$10,000 is] a number that will surprise a lot of people.”
“We’re all feeling that at the pump,” Brannon said. “That is driving a big piece of [the annual price increase], and particularly with Americans’ desire to drive things like pickup trucks that don’t get good fuel economy.” AAA’s study noted that with the cost of gas-powered vehicles climbing, more and more Americans hoping to purchase a new car are turning instead to electric vehicles, which have lower maintenance, repair, and tire costs.
A separate AAA consumer survey found that saving money on fuel costs was the biggest factor behind Americans’ desire to buy an electric car, however 60 percent of those surveyed said the higher purchase price for an electric vehicle was holding them back from doing so. A similar survey from Consumer Reports in July found that 52 percent of the 8,000 American respondents said that the costs of buying and maintaining an electric vehicle are too expensive.
As gas prices have risen since the start of the year, the Biden administration has regularly touted electric vehicles for Americans who want to save on fuel costs.
However, the average price of a new electric vehicle in July 2022 was over $66,000, according to automotive research company Kelly Blue Book, whereas the average price of a new gas vehicle was $48,182.
Source: The Epoch Times
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