AAA Study: Car Ownership Costs Hit $12,863 Annually

AAA’s newly released 2026 Your Driving Costs analysis challenges the way consumers traditionally shop for cars: a lower fuel bill or attractive monthly payment can disguise a substantially more expensive vehicle to own. The findings give shoppers a timely reason to rethink the traditional question, “How much car can I afford?” And, the more revealing question: “What will this car actually cost me by the time I’m done owning it?”

The analysis puts the average cost of owning and operating a new vehicle at $12,863 a year, or $1,071.92 every month, underscoring a financial reality many shoppers may overlook: the price negotiated at the dealership is only the beginning of what a vehicle actually costs.

The findings also challenge some conventional assumptions about which vehicles save buyers money. AAA found that depreciation remains the single largest ownership expense, averaging $4,422 annually. EVs delivered fuel costs roughly 66% to 70% lower than comparable gas vehicles, yet those savings were often overwhelmed by depreciation, financing, fees and other expenses. In the medium-sedan category, for example, AAA found an EV cost 29.1% more annually to own than a comparable gas model. Hybrids, meanwhile, emerged as the most consistently lower-cost alternative to gas vehicles across the categories AAA compared.