What Is the Total Cost of Owning a Car?

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What is the total cost of owning a car?

Total costs for your car include many more things than a loan payment. Make use of NerdWallet’s calculator for a quick estimate of how much you’re paying.

by Whitney Vandiver Writer | Car ownership, car maintenance Whitney Vandiver writes for NerdWallet about how car owners can save money on ownership and maintenance. She was previously a writer in the oil and gas industry which led to her being published in national journals as well as international magazines. Whitney began writing out of enjoyment and finds stories that showcase or help those in the LGBTQ+ community the most rewarding to craft. When she’s not writing, she enjoys walking and reading with her Irish wolfhound. She’s based in Houston.

as well as Shannon Bradley Lead Writer | and Shannon Bradley Lead Writer, loans Shannon Bradley covers Shannon Bradley covers auto loans and auto loans for NerdWallet. While in college, pursuing a journalism degree, Shannon completed an internship which led her not to the newsroom but to a bank marketing department. She worked for the next 30+ years as a journalist and content manager in the financial services industry, creating educational content that covered a wide variety of business and personal financial subjects. After being a frequent NerdWallet user for several years, Shannon welcomed the opportunity to join the NerdWallet team as a writer and help more people with financial decision-making. Shannon lives at Newburgh, Indiana.

Dec 8, 2022

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Table of Contents

Table of Contents

Estimating the total cost to owning your car or one you could purchase soon is the best method to ensure your automobile budget is on track. But with soaring car prices with higher interest rates, and jumping gas prices It can be difficult to determine exactly how the cost of your car is to you.

Here’s what you should know about the cost of owning a vehicle, including the cost of a monthly mortgage, common ownership costs and the best way to go about saving money while still driving the car you are passionate about.

Cost per month for the average

The median monthly cost for a new car was $700 in the third quarter of 2022, according to credit-reporting agency Experian. That’s the increase in $91 from the previous year. Leasing a new car was less expensive at $497 per month, and acquiring an used vehicle was the most affordable option with an average monthly installment of $525. Regardless of your choice however, you’ll likely be paying more than $500 per month for financing a vehicle purchase.

However, that’s not the actual cost of owning an automobile.

When you factor in loan depreciation, interest and insurance, as well as fuel maintenance and fees, the cost of owning a car makes an enormous leap. For new vehicles driven 15,000 miles a year, average car ownership costs were $17,728 for the year, or $894 a month in 2022 according to AAA.

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Are you calculating the cost of a car you don’t have yet? See average payments here


New automobiles

Cars that are used

Leases (new)

Monthly payment




The loan amount




A loan term

69.73 months.

68.08 months.

35.86 months.

Source: State of the Automotive Finance Market, Experian Information Solutions Inc.

Common costs of owning an automobile

No matter what vehicle you use, you’re bound to be required to pay for these things frequently.


Prices fluctuate almost every day fuel is among the most fluctuating costs of driving a car. According to AAA that the average motorist paid around 18 cents a mile for regular unleaded fuel in early 2022. For a 15,000-mile annual period, that’s $2,700 annually just in fuel.

The good news is that cost of fuel can vary by the type and size of vehicle. Sedans generally get better gas mileage than larger vehicles such as trucks and SUVs such as, for example, and can save cash at the pump.

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Repairs and maintenance

However, the average cost of repairs, maintenance as well as tires can be $121 per month for a new car, according to AAA. The most common maintenance expenses include tire rotations, which are usually performed at intervals of 5,000 miles or, in this case 3 times per year.

While you’ll likely be required to pay for normal maintenance brought on by damage and wear, you won’t have to pay for certain repair costs if your car is still covered under the factory warranty or an extended warranty. Manufacturer warranties are typically for three months or 36,000 miles depending on the number you reach first.

If your vehicle isn’t covered under warranty, you should save an amount of money to cover repairs, regardless of whether they’re required every monthly or not. This prevents you from being confronted with a bill that is unexpected in the event of an irregularly scheduled maintenance requirement.

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Registration, fees , and taxes

According to AAA The most common car owners will have to pay $675 in 2022 to obtain a license, registration and tax to legally drive their vehicle.

The way these fees are calculated, the often they have to be paid and how much they cost vary depending on the state. The place you reside and the type of fee you have to pay will determine the amount you will have to pay each year for this category.


Every state has a requirement for insurance. The average annual premium for insurance with full coverage is Americans $1,588, according to AAA.

However, the premium is affected by a variety of factors, such as the selected coverage as well as the type of vehicle you use, your age, your driving record and the location you live in. Based on your personal circumstances and the coverage you choose you could pay more or less than the standard price.

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While it’s not a loan that requires you to pay cash, vehicles usually lose value over time. That means that you’re losing money over time and it affects your total cost of owning a car.

It’s crucial to recognize that the is a unique one where depreciation has shrunk but this is expected to be changed in the near future. In some cases, depending on the type of car and the market demand, certain vehicles in the last 12 months are worth more than they did when they were brand new..

In a normal market automobiles lose between 15 to 20 percent of their value within their first year. Over the next four years, depreciation will be around 15% per year.

Depreciation, while it’s not money you pay out from your wallet but it’s an expense of owning a car when you are planning to sell the car.

To get an idea of how much your car has depreciated, compare current prices for the same model and make against the price you originally paid for it. Find out through a service such as Kelley Blue Book. or get a cash offer from a local dealer or one such as Carvana and Vroom..

While there are ways to reduce the cost, you aren’t in control of the expense after you own your own vehicle.

From top to bottom

How can you estimate the total cost of owning a car

You can use our calculator to find out how much your car is costing you every month . The calculator is pre-populated with estimates based on 15,000 miles of driving per year, so we strongly urge you to input your exact expenses to determine the total cost of your car.

Insurance premiums and car insurance are easy to understand, but here’s more information on estimating other costs of the ownership of a car.

Gas. If you are aware of how much you typically pay for fuel, you can enter the figure into the calculator. If not, divide the number of miles you drive each month by your car’s efficiency rating, which you can find on . Multiply that number by cost of a gallon of gas in your region.

Repairs and maintenance. You can go with the monthly average which is pre-populated using AAA’s information. If your vehicle has needed a lot of work lately , and it’s taking more than $1,500 a year in work you can calculate the exact figure for what you’ve paid in the past 12 months . You can put it here.

Registration, fees, taxes and other miscellaneous. The process is simple Put in the annual registration fee for your motor vehicle renewal cost, and divide by 12. Add any other ongoing expenses such as parking charges.

*Note: The total car cost calculator is pre-populated with estimates based on the data of Experian in addition to AAA. Check out our methodology below.

Saving on your biggest car costs

When you look at your total costs of owning a car you will be able to see the percentage of your income that is used to pay for the car every month. It’s recommended to budget less than 15%-20 percent of your monthly take-home earnings for vehicle expenses.

If you notice you’re spending too much or you’re looking to reduce expenditure, take a look at the big ticket items first. Then work your way through the costs that you are able to control.

Car payment. Consider the possibility of refinancing your loan to see if you can qualify for a lower rate. This can bring down the cost of your monthly payments.

Insurance premiums. Discuss with your current insurance provider about possible discounts. If they won’t assist you in obtaining a better rate, get quotes from different insurers to find a better price for your coverage.

Gas. Pay attention to gas prices using a tool to find the most affordable prices, and then use .

From top to bottom

About the authors: Whitney Vandiver is a writer at NerdWallet currently writing about maintenance and car ownership. She’s previously written about payments for small businesses and payment.

Shannon Bradley covers auto loans for NerdWallet. She worked for over 30 years in banking as a writer for financial education content.


The estimates and averages that are used to populate this calculator come from several sources.

Estimates for used and new car payments are from Experian’s Q3 2022 report.

The most recent AAA study gives an annual average cost for a range of car-related expenses. AAA figures are based on a new vehicle which was in use for five years and driving 15k miles per year. We’ve converted these figures into monthly sums. The total monthly car cost calculator utilizes AAA information for these monthly medians.

– Gas

– – Insurance

License, registration, and other fees

Repair, maintenance and tires

On a similar note…

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