The real costs of owning a car — and why Georgia isn’t the most-expensive state

For the last several weeks, this study on the cost of automotive ownership ranked by state has been all over — published, broadcasted nationwide, and blogged hundreds of times. According to Bankrate.com, Georgia, California and Wyoming are the three most expensive states in which to own a vehicle, with Georgia ownership costing $4,233 a year, while Oregon is the cheapest at $2,204.

There is only one problem with the findings: They're simply wrong.

Let's focus on two states with similar populations but strikingly different totals, New Jersey and Georgia. I just so happen to have a keen working knowledge of car ownership costs in both states from living in them and my career as a car dealer:

While fuel and insurance costs differ, they cancel each other out in the rankings; the largest difference comes from taxes and other fees, where the study finds the average Georgian supposedly pays $1,952 a year — more than double the cost of taxes than the average New Jerseyan. This one finding alone propels Georgia to the highest cost of ownership in the country, while keeping New Jersey in the healthy middle of the pack.

Remember, this is supposedly the costs an average owner — not merely those buying or selling a vehicle — pays every year for their vehicle.

So what are the taxes and fees for these two states?

New Jersey is higher overall; although both states offer a bit of positive and negative weirdness in those numbers. New Jersey requires all new car owners to pay four years of registration renewal fees in advance, while Georgia recently passed a title tax to replace the sales tax. Like most other states, farmers, senior citizens and a long line of others get a discount or an exemption.

But under any interpretation, there is no way given the numbers above that the average Georgian pays more than twice as much as the average New Jerseyan. And such a result doesn't pass the common-sense test: Georgia now ranks 40th in per capita income while New Jersey ranks 3rd. The tax base is smaller in Georgia, as is the state government's needs. New Jersey will collect an estimated $31.3 billion in revenues for 2013, while Georgia is slated to collect $19.3 billion.