New cars are expensive, but you already know that.
You might not be thinking about the total cost of ownership, however.
That number, also probably not a surprise, is notable, too.
An analysis released in September by AAA puts the average annual cost to own and operate a new vehicle at $12,863, or $1,071.92 per month. That’s higher than last year’s analysis showing $11,577, or $964.78, but AAA cautions that changes in its methodology mean it doesn’t offer a direct comparison (The analysis covers five years and 75,000 miles of ownership).
Still, there’s no doubt costs are high.
Just ask Ray Shefska, who runs a popular YouTube channel and website under the CarEdge banner with his son,
Zach, focused on car buying.
He pointed me to new data from J.D. Power that shows average new vehicle payments for September are expected to hit a record $821 per month.
“To me, that’s an astronomical number,” he said.
But echoing the AAA Your Driving Costs analysis, Shefska said there’s much more to consider than just price, even though most people fixate on that monthly payment.
Take depreciation.
Shefska said he often hears comments along the lines of how depreciation doesn’t matter until you sell your car. But “you should care. It’s still depreciation,” he said.
AAA found that depreciation equals a $4,422 loss in value per year.
Here are some other takeaways directly from the AAA analysis:
- Small sedans, at 61.73 cents per mile, had the least expensive overall costs
- Medium SUVs, at 96.32 cents per mile, were the second-most expensive category of vehicles to own and operate behind half-ton pickups ($1.10 per mile)
- The national average cost for license, registration and taxes was $802 per year.
- Maintenance, repair and tires cost 11.7 cents per mile.
- Fuel cost averaged 17.3 cents per mile for a 12-month period ending May 26 so it doesn’t account for any more recent increases.
Shefska had some advice for consumers contemplating a new car, given the high costs at play: Consider your needs rather than your wants and live within your means.
Eric D. Lawrence is the senior car culture reporter at the Detroit Free Press, and he also writes about recreational vehicles, boats and bikes. Send your tips and suggestions to elawrence@freepress.com. Become a subscriber. Submit a letter to the editor at freep.com/letters.
This article originally appeared on Detroit Free Press: New car ownership now tops $1,000 a month. The payment isn't the worst part.
