The Yearly Cost Of Car Ownership Went Way Up In 2023: Report

The average cost of owning and operating a car has gone up this year due to higher MSRP figures and increased finance costs, among other things. In 2023, the annual expense of vehicle ownership increased to $12,182, which comes out to a monthly cost of $1,015, according to the American Automobile Association.

AAA has been calculating yearly ownership costs for decades, and its latest study assumes a five-year ownership period wherein owners drive 15,000 miles per year for a grand total of 75,000 miles. The consumer agency looked at nine classes of vehicles (45 models in all) and compared their associated costs across the following six categories: fuel, maintenance/repair/tire costs, insurance, license/registration/taxes, depreciation, and finance charges.

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While it’s true that a car’s sticker price directly affects monthly payments, the MSRP also affects finance charges. Average vehicle MSRP in 2023 was $34,876, which is nearly five percent higher than last year. And annual finance charges averaged $1,253 this year, which is reportedly a 90% increase from last year.

Chalk it up to higher interest rates, but other factors that raised average costs include more aggressive depreciation on new cars: AAA says vehicles coming off the lot for the first time will “depreciate by an average of $4,538 per year over five years of ownership, up 24% over 2022.”