The annual new car ownership costs have increased to $12,181 a year, or a monthly cost of $1,015, according to AAA. The rise has contributed to record new car prices and a 90% increase in finance rates.
For 2022, the average yearly cost for ownership of a new vehicle was only $10,728 a year, or $894 a month.
“It’s important for car buyers to clearly understand the costs associated with owning a new vehicle.” said Greg Brannon, AAA’s director of automotive research. “Due to global supply chain issues and constrained inventory of new vehicles, car prices rose dramatically in 2022. And while the situation continues to improve, the spillover effects are keeping prices high.”
AAA continued in a release showing the average manufacturer’s suggested retail price (MSRP) for a new vehicle is $34,876, a 4.7% increase from last year. It was also noted a higher sticker price also directly impacts the finance costs for the vehicle, with 2023 vehicles having an average annual finance charge of $1,253, a massive 90% increase to last year’s numbers.
Change to the annual cost of owning a new vehicle is also contributed by vehicle depreciation, with new vehicles expected to depreciate by about $4,500 a year over the next 5 years of ownership, massive increase in new vehicle prices, and automakers focusing on producing more larger, luxurious and expensive vehicles.
With that, it comes at no surprise that ½ ton pick-up trucks have the highest average driving cost among all the vehicle categories, according to the study performed by AAA. The pick-up truck market has slowed in the past year due to high gas prices and financial costs. AAA says pick-ups come at a cost of $1 per-mile.
“The once popular pickup truck is now seeing a slight decline in demand as these vehicles have become increasingly expensive, rivaling the price of many luxury cars,” said Brannon. “As interest rates continue to climb, this adds a layer of expense per month that consumers should consider when shopping for their next vehicle.”
AAA provides a Your Driving Costs online calculator, which will provide a personalized breakdown for would-be car shoppers. You can find the calculator, HERE.