Total Cost of Ownership Calculator
The real cost of a car is not the monthly payment. Calculate your complete annual ownership cost — depreciation, fuel, insurance, maintenance, finance, and registration — using the latest AAA Your Driving Costs 2025 data. The national average is $11,577/year.
Last updated: April 2026 · Source: AAA Your Driving Costs 2025 (released September 16, 2025)
AAA 2025 avg: $3.151/gallon
AAA 2025 avg: $1,694/year full coverage
The real cost of car ownership in 2026
For over 70 years, AAA has published the Your Driving Costs study — the most authoritative annual snapshot of what it actually costs to own and operate a car in the United States. The 2025 edition (released September 16, 2025) puts the total at $11,577 per year, or about $965 per month, for the average new vehicle. That is down $719 from 2024 — a rare drop, driven by lower depreciation, reduced fuel prices, and Federal Reserve rate cuts.
"It might be tempting to rush to the dealer for a new car when you notice a drop in ownership costs this year," said Greg Brannon, AAA\'s director of automotive research. "However, consumers should factor in all the expenses involved before making any commitments." The point: the headline number masks enormous variation. A small sedan costs $9,790/year. A half-ton pickup costs $16,716/year. The vehicle you choose matters more than most of the hacks you might try to save money on the one you have.
The single biggest cost is something most owners do not even track: depreciation. AAA calculates the average new vehicle loses $4,334 in value per year over the first 5 years. That is more than fuel and insurance combined. It does not show up on your monthly bills, but it is real money you will not get back when you sell or trade.
Cost of ownership by segment (AAA 2025)
| Segment | Annual cost | Per day | Per mile |
|---|---|---|---|
| Small sedan | $9,790 | $26.82 | 55.87¢ |
| Hybrid | $10,937 | $29.96 | 54.69¢ |
| Subcompact SUV | $11,472 | $31.43 | 57.36¢ |
| Medium sedan | $11,519 | $31.56 | 57.59¢ |
| Compact SUV | $11,859 | $32.49 | 59.29¢ |
| Electric (EV) | $11,887 | $32.57 | 59.43¢ |
| Midsize pickup | $13,735 | $37.63 | 68.67¢ |
| Midsize SUV | $14,355 | $39.33 | 71.77¢ |
| Half-ton pickup | $16,716 | $45.80 | 83.58¢ |
Source: AAA Your Driving Costs 2025. Based on 5-year ownership × 15,000 miles/year. The gap between a small sedan and a half-ton pickup is $6,926/year — about $34,600 over 5 years.
Where the money actually goes
For the average new vehicle in the AAA 2025 study, here is where every dollar of ownership cost ends up:
Depreciation is bigger than fuel and insurance combined. This is why picking the right vehicle matters more than the gas-saving hacks most people focus on.
Three real-world TCO scenarios
1. The "I need a truck" buyer who actually does not
Carlos buys a $52,000 half-ton pickup because he might tow a trailer twice a year. Total annual cost: about $16,716. He could have bought a $32,000 compact SUV with the same seating capacity and storage for $11,859/year. The pickup costs him an extra $4,857 per year — $24,285 over 5 years. He could rent a U-Haul 30 times for that money.
2. The hybrid that actually saves money
Priya picks a $30,000 Toyota Corolla Hybrid (52 MPG) over a $28,000 Toyota Corolla LE (35 MPG). At 15,000 miles/year and $3.15/gallon: hybrid uses 288 gallons/year ($908), gas version uses 429 gallons/year ($1,351). Hybrid saves $443/year on fuel. Plus the hybrid depreciates slower (35.4% vs ~39.5% over 5 years). Total 5-year savings: about $4,200 — far more than the $2,000 price premium.
3. The 8-year-old paid-off Civic
David has a 2018 Honda Civic he bought used in 2020 for $18,000. It is paid off, depreciation is mostly absorbed, and his only ongoing costs are insurance ($1,200/year), fuel ($1,400), maintenance ($800), and registration ($200). Total: about $3,600/year — less than a third of the AAA average. Every year he keeps the car instead of buying new is roughly $8,000 he can save or invest. Over 5 more years that is $40,000.
Common TCO calculation mistakes
1. Forgetting depreciation entirely
The biggest cost of ownership does not show up as a monthly bill, so most people just ignore it. Wrong move. Track it, even if just on a spreadsheet.
2. Comparing only the monthly payment
A $400/month payment on an expensive-to-insure, gas-guzzling SUV can cost $200/month more in TCO than a $500/month payment on an efficient sedan.
3. Underestimating insurance for new cars
Insurance on a brand-new $50,000 vehicle can run $2,500-$4,000/year, especially if it has expensive replacement parts or high theft rates. Get a quote before buying.
4. Assuming "EVs save money"
EVs do save on fuel and maintenance, but they cost more in depreciation, insurance, and financing. The net is often a wash with comparable gas vehicles, per AAA 2025.
5. Ignoring out-of-warranty repairs
AAA\'s maintenance figure assumes 5 years and includes an extended warranty. After year 5, real-world repair costs typically rise sharply. Budget extra if you plan to keep the car long-term.
Frequently asked questions
What is the average annual cost of owning a car in 2026?
According to AAA's Your Driving Costs 2025 study (released September 16, 2025), the average annual cost of owning and operating a new vehicle is $11,577 — about $964.78 per month. That is a $719 decrease from 2024, driven by lower depreciation, reduced fuel prices, and modest finance rate cuts. The figure assumes a 5-year ownership period and 15,000 miles driven per year.
What are the main components of car ownership cost?
AAA breaks the total into six categories: depreciation ($4,334/year average, the biggest single cost), insurance ($1,694/year), fuel (~$1,950 at 13 cents per mile), maintenance/repair/tires ($1,656 at 11.04 cents per mile), finance charges ($1,131/year), and license/registration/taxes ($813/year). Depreciation alone accounts for nearly 38% of total ownership cost — most owners massively underestimate this.
Which type of vehicle is cheapest to own?
According to AAA 2025 data, the cheapest segment to own is a small sedan at $9,790/year ($26.82/day, 55.87 cents/mile). Hybrids come in second at $10,937/year. The most expensive is a half-ton pickup at $16,716/year ($45.80/day, 83.58 cents/mile) — about $6,900 more per year than a small sedan over the same 15,000 miles. That gap of $34,500 over 5 years pays for itself many times over for buyers who do not actually need a truck.
Are EVs cheaper to own than gas cars?
Per AAA 2025 data: not yet, but close. The average EV costs $11,887/year vs $11,519/year for a medium sedan. EVs win on fuel ($729/year for electricity vs $1,669/year for gas) and maintenance, but lose on depreciation, insurance, and financing. As iSeeCars 2026 confirmed, EVs depreciate 57.2% over 5 years vs 41.8% for the average car — and EV insurance runs higher because of expensive battery replacement risk and parts complexity.
Why is depreciation the biggest cost?
On a $35,000 new car with average 41.8% 5-year depreciation, you lose roughly $14,600 in resale value over 5 years — about $2,920/year. Add the steeper first-year drop and the actual annual average is closer to $4,300. No other cost category comes close. Fuel for the average driver is about $1,950/year. Insurance is $1,694/year. Combined, fuel and insurance still do not match depreciation alone.
How does AAA calculate Your Driving Costs?
AAA evaluates 9 vehicle categories spanning 45 popular models for the gas/hybrid analysis, plus 4 EV-specific categories with 11 models. Costs are calculated assuming 5-year ownership and 75,000 total miles (15,000/year), based on a 5-year loan with 15% down at the national average interest rate. Fuel pricing uses a 12-month average. The result is the most authoritative annual snapshot of US car ownership costs — AAA has been publishing this study for over 70 years.
Should I include tax write-offs for business use?
If you use the car for self-employment or business, the business-use portion of every category is deductible — depreciation (via Section 179 or actual expense method), fuel, insurance, maintenance, registration, and finance interest. The IRS standard mileage rate for 2026 is approximately $0.70/mile, which can simplify recordkeeping. For commuting only, none of it is deductible. Talk to a tax professional and keep detailed mileage logs.
How can I reduce my total cost of ownership?
In order of impact: (1) Buy a 2-3 year old certified pre-owned vehicle to skip the steepest depreciation. (2) Pick a model with strong resale value (Toyota, Honda, Lexus, certain trucks). (3) Keep the car 7-10 years instead of trading every 3-4 years. (4) Shop insurance every 6-12 months. (5) Do basic maintenance yourself when possible. (6) Refinance the auto loan if your credit improved. (7) Drive less if you can, especially during peak fuel-price periods.
Is it cheaper to keep my old car or buy a new one?
Almost always cheaper to keep the old one, especially after the loan is paid off. A paid-off 8-year-old car with $200/month in maintenance and fuel costs roughly $2,400/year. A new car at AAA average costs $11,577/year. The difference of $9,000+ per year for 5 years pays for a $45,000+ new car. Only switch when the old car needs repairs that exceed its value or when reliability becomes a safety issue.
What is "cost per mile" and why does it matter?
Cost per mile is the total annual ownership cost divided by miles driven. AAA's 2025 weighted average is roughly 77 cents per mile (across all segments). Small sedans hit 55.87 cents/mile, half-ton pickups hit 83.58 cents/mile. Cost per mile is useful for comparing vehicles of different sizes and for figuring out the real cost of a road trip — a 1,000-mile trip in a pickup costs about $836 in real ownership cost, vs $559 in a small sedan.
Does AAA include repairs after the warranty expires?
AAA's maintenance figure ($1,656/year average) includes routine maintenance, an extended warranty, wear-and-tear repairs over 5 years, and one set of replacement tires. After year 5 — once the original AAA-modeled period ends — actual repair costs typically rise. A car driven 6-10 years old often hits $200-$400/month in unexpected repairs in addition to regular maintenance. Budget for this if you plan to keep the car long-term.
Are insurance rates included in AAA's number?
Yes. AAA uses $1,694/year as the average annual full-coverage premium for the YDC study. This is based on a driver under 65 with more than 6 years of driving experience, no accidents, living in suburbs or city. Real insurance rates vary enormously: a young driver with at-fault accidents in Detroit might pay $5,000+/year. A 55-year-old with a clean record in rural Iowa might pay $700/year. Plug your real number into the calculator above for accuracy.
Data sources: AAA Your Driving Costs 2025 study (released September 16, 2025); Greg Brannon, AAA Director of Automotive Research; iSeeCars 2026 5-Year Depreciation Study; Experian Q4 2025 State of the Automotive Finance Market; NerdWallet 2025 cost of car ownership analysis.
Last updated: April 2026. AAA publishes Your Driving Costs annually each September. Component costs vary year-to-year based on market conditions.
Disclaimer: This calculator provides estimates for educational purposes only and is not financial advice. Your actual cost of ownership depends on many factors including your specific vehicle, location, driving habits, insurance profile, and credit score.