Rising gas prices and high finance charges are driving the cost of owning a new car to more than $12,000 a year.
A new report from AAA says that breaks down to more than $1,000 a month. The report says that gas-powered medium sedans cost $10,582 per year to own. Electric vehicles have the lowest fuel costs but lose value faster.
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AAA estimates that EVs are about 66%–70% lower than fuel costs for traditional gas vehicles. The report notes that because gas costs have surged relative to electricity, the gap between expenses between gas-powered engines and EVs have decreased.
The study found hybrid vehicles are the most consistent way to save money.
“By looking at EVs, hybrids and traditional gas-powered vehicles within the same categories, consumers can better understand how total ownership costs vary by powertrain,” said Greg Brannon, AAA’s director of automotive engineering. “Looking at the full ownership picture—including depreciation and other expenses—can help consumers better understand the total cost of each option.”
AAA recommends creating a budget before buying your next car and getting preapproved by a bank before discussing financing with a dealership.
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