EVs save a lot of money of fuel but are hit hard by depreciation.

There’s more expense to owning a car than simply making the monthly payments, and how much you’ll spend varies significantly based on what type of car you drive. A new study from AAA reveals a new car purchased in 2017 will set its owner back an average $8,469 per year annually – that’s $706 per month – though that figure can jump by a big amount if you’ve got certain types of cars.

The study was based on 45 new vehicles from the 2017 model year, and evaluates depreciation costs, maintenance and repair, and fueling costs – but not your payment or insurance. This is the first year the AAA Your Driving Costs report has also included data for electric cars. Specifically, AAA found that electric cars have lower-than-average annual running costs, at $8,439 per year. That’s due in part to extremely low fuel costs, and the reduced servicing costs of an electric powertrain compared to an internal combustion one. But those gains and countered by the fact that EVs tend to have higher-than-average depreciation – an average of $5,704 per year, according to AAA’s data.

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“Although electric vehicles can have higher up-front costs, lower fuel and maintenance costs make them a surprisingly affordable choice in the long run,” John Nielsen, AAA managing director of Automotive Engineering and Repair, said in a statement.

As to other categories of vehicles, the study ranked small sedans as the cheapest vehicles to own ($6,354 per year on average), followed by small SUVs ($7,606), hybrid cars ($7,687), and medium sedans ($7,867). The costliest models were, perhaps unsurprisingly, larger vehicles that tend to use more fuel and cost more upfront: large sedans ($9,399 annually), medium-sized SUVs ($9,451), and pickup trucks ($10,054).

Of those categories, AAA says that fuel costs generally cost an average of $1,500 per year, or roughly 10 cents per mile, for most drivers. (And that’s counting the fact that, according to AAA, American drivers waste $2.1 billion filling up with premium fuel when they don’t need to.) Maintenance on new model-year 2017 cars – maintenance, new tires, and other repairs – average $1,186 annually.

Even within AAA’s broad categories, however, there are big differences in the running costs for various vehicles. If you’re interested in keeping those costs to a minimum, be sure to check out our in-depth analyses of the cars with the cheapest and most expensive maintenance costs.

Source: AAA

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AAA Reveals True Cost of Vehicle Ownership

Average new vehicle will cost nearly $8,500 annually to own and operate

Owning and operating a new vehicle in 2017 will cost a driver an average of $8,469 annually, or $706 each month, according to a new study from AAA. The annual evaluation of driving costs reveals that small sedans are the least expensive vehicles to drive at $6,354 annually, however small SUVs ($7,606), hybrids ($7,687) and electric vehicles ($8,439) all offer lower-than-average driving costs to U.S. drivers. Conversely, of the nine categories included in the evaluation, pickup trucks are the most expensive vehicles to drive at $10,054 annually.

 “Determining the cost of a new vehicle car is more than calculating a monthly payment,” cautioned John Nielsen, AAA’s managing director of Automotive Engineering and Repair. “While sales price is certainly a factor, depreciation, maintenance, repair and fuel costs should be equally important considerations for anyone in the market for a new vehicle.”

In addition to analyzing the ownership costs for sedans, SUVs and minivans, AAA’s Your Driving Costs study added four new vehicle segments in 2017 – small SUVs, pickup trucks, hybrids and electric vehicles.

Vehicle Type   Annual Cost*              Vehicle Type   Annual Cost*

Small Sedan    $6,354            Minivan           $9,146

Small SUV       $7,606            Large Sedan    $9,399

Hybrid  $7,687            Medium SUV  $9,451

Medium Sedan           $8,171            Pickup Truck    $10,054

Electric Vehicle           $8,439            Average           $8,469

*Based on 15,000 miles driven annually

To estimate the overall cost to own and operate a new vehicle, AAA evaluated 45 2017 model-year vehicles across nine categories and focused on mid-range, top-selling vehicles. AAA’s annual driving cost is based on a sales-weighted average of the individual costs for all of the vehicle types. Key findings include:

Depreciation

Depreciation — the declining value of a vehicle over time — is the biggest, and most often overlooked, expense associated with purchasing a new car. New vehicles lose an average of $15,000 in value during the first five years of ownership. In 2017, small sedans ($2,114) and small SUVs ($2,840) have the lowest annual depreciation costs, while minivans ($3,839) and electric vehicles ($5,704) are at the high end of the scale.

Maintenance and repair

To calculate annual maintenance and repair costs, AAA examined factory-recommended maintenance, replacement tires, extended warranty costs and services associated with typical wear-and-tear. New vehicles, on average, will cost a driver $1,186 per year to maintain and repair.

The inevitable costs associated with maintenance and repair should be an important consideration for car shoppers, as a recent AAA survey found that one-third of U.S. drivers could not afford an unexpected repair bill. AAA Approved Auto Repair facilities offer free vehicle inspections, AAA member discounts and a 24-month/24,000-mile warranty for AAA members. Visit AAA.com/AutoRepair to find a nearby facility.

Fuel

Fuel costs vary significantly by vehicle type, ranging from 3.68 cents per mile (electric vehicles) to 13.88 cents per mile (pickup trucks). New vehicle owners, on average, will spend just over 10 cents per mile – about $1,500 annually — to fuel their vehicles.

For gasoline-powered vehicles, AAA recommends selecting a TOP TIER gasoline, as its independent research found it to keep engines 19 times cleaner, improving vehicle performance and fuel economy. AAA cautions drivers that using premium-grade gasoline in a vehicle that does not specifically require it is an unnecessary expense.

Electric Vehicles

New to the Your Driving Costs study in 2017, AAA found that electric vehicles have lower-than-average driving costs at $8,439 per year. Without a gasoline engine to maintain, electric vehicles have the lowest annual maintenance and repair costs, at $982 per year. By relying on electricity instead of gasoline, fuel costs are also significantly lower than average, at under four cents per mile. Depreciation, however, is currently extremely high for these vehicles, losing an average of nearly $6,000 in value every year.

A recent AAA survey revealed that 1-in-6 Americans are likely to choose an electric vehicle, the majority motivated by their lower long-term ownership costs.

“Although electric vehicles can have higher up-front costs, lower fuel and maintenance costs make them a surprisingly affordable choice in the long run,” said Nielsen. “For even lower costs, car shoppers can avoid high depreciation costs by selecting a used electric vehicle.”

With a focus on the future, the AAA Green Car Guide offers ratings of electric, hybrid, compressed natural gas‐powered (CNG), diesel and other high fuel economy vehicles. Visit AAA.com/greencar for more.

AAA’s Your Driving Costs study employs a proprietary methodology to analyze the costs of owning and operating a new vehicle in the United States, using data from a variety of sources, including Vincentric LLC. Additional information and detailed driving costs, including insurance costs, finances charges, registration/license fees, taxes and finance charges can be found at NewsRoom.AAA.com or AAA.com/YourDrivingCosts.

As North America’s largest motoring and leisure travel organization, AAA provides more than 57 million members with travel, insurance, financial and automotive-related services. Since its founding in 1902, the not-for-profit, fully tax-paying AAA has been a leader and advocate for the safety and security of all travelers. Motorists can map a route, identify gas prices, find discounts, book a hotel and access AAA roadside assistance with the AAA Mobile app for iPhone, iPad and Android. Learn more at AAA.com/mobile. AAA clubs can be visited on the Internet at AAA.com.