What Is the Total Cost of Owning a Car?

Calculating the total cost of owning your car — or one you might buy soon — is the best way to make sure your auto budget is in line. But with many different factors contributing to the cost of car ownership, it can be difficult to know exactly how much your car is costing you.

Here’s what you need to know about the cost of owning a car, including common ownership expenses and some possible ways to save on them.

The average monthly payment on a new car was $749 in the second quarter of 2025, according to credit reporting agency Experian. Leasing a new car was cheaper at $612 a month, and owning a used car was the cheapest option, with an average monthly payment of $529^[0]

Regardless of your choice, you’re still likely to be paying over $500 a month whether you finance or lease a vehicle.

But that’s far from the true cost to own a car, when you take into account loan interest, depreciation, fuel, insurance, maintenance and fees. In its 2025 Your Driving Costs study, AAA says the average ownership cost for a new vehicle driven 75,000 miles over five years is $11,577 annually, a decrease of $719 compared to the previous year. That breaks down to about $965 a month^[0]

Regardless of the car you drive, you’re likely to have to pay for certain items on a regular basis. AAA's 2025 study provides averages for these common costs overall, and by gas-powered, hybrid or electric vehicle^[0]

Fuel

Fuel is one of the most variable costs of driving a car, and your fuel could be gasoline, electricity or a combination. According to AAA, drivers overall pay an average of 13 cents a mile for fuel. This is based on average prices for regular unleaded gas and electricity per kilowatt hour during a 12-month period ending in May 2025. For a 15,000-mile year, that’s $1,950 annually in fuel.

Your actual fuel expenses could be less or more than the average, depending on where you live and the type and size of vehicle you drive. Here's a comparison of fuel costs for several different vehicle types.

Average annual fuel costs

» MORE: Average gas prices by state

Insurance

Almost every state requires some auto insurance coverage. The average annual premium for full-coverage insurance runs car owners $1,694, according to AAA. But the cost of insurance is influenced by several factors, including the selected coverage, the type of car you drive, your age, your driving record and your location. Depending on your circumstances and coverage options, you might pay more or less than the average premium.

Average annual insurance cost (full-coverage)

Maintenance and repairs

Overall, drivers pay an average of 11.04 cents a mile for vehicle repairs, maintenance and tires. According to AAA, this figure "includes retail parts and labor for routine maintenance specified by the vehicle manufacturer, a comprehensive extended warranty, repairs to wear-and-tear items that require service during 5 years of operation and one set of replacement tires."

Maintenance, repair and even tire replacement costs can vary widely depending on the type of vehicle you drive. For example, an electric vehicle doesn't have an internal combustion engine, so it won't need oil changes. On the other hand, because EVs are heavier, their tires typically need replaced more often than a gas-powered vehicle.

Average annual maintenance costs

License, registration, taxes

According to AAA, the average car owner pays $813 annually for licensing, registration and taxes to legally drive their vehicle. The state you live in determines which of these fees you will pay, how they're calculated and the total amount you pay annually for this category. The type of vehicle also makes a big difference.

Average annual license, registration, taxes

Depreciation

Although depreciation isn’t a payment that has you shelling out cash, cars usually lose value over time. This loss of value means you'll get less if you sell or trade the car, which affects your overall cost of ownership. According to the 2025 AAA study, the average annual vehicle depreciation is $4,334, but again that amount varies greatly depending on vehicle type.

Cars typically lose around 15% to 20% of their value in their first year (and about 15% annually over the next four years). To get an idea of how much your car has depreciated, compare your car’s current resale value to what you paid originally. Websites like Kelley Blue Book, Edmunds or iSeeCars can give you an idea about how much certain makes and models tend to depreciate.

Average annual depreciation cost

Finance charges

The average annual cost of financing charges, or the interest paid on an auto loan, is $1,131 a year. AAA bases this figure on a 60-month loan at the national average interest rate. But, your total finance charges will depend on factors such as how much you put down on a car, the amount you end up financing, loan length and your credit score.

Use our calculator to estimate how much a car will cost you each month. The calculator is pre-populated with AAA costs for driving a new, gas-powered car 15,000 miles annually (broken down to monthly), but you can replace those with your own numbers.

Enter exact amounts for a gas, hybrid or electric vehicle you currently drive, or use these tips to estimate costs for one you're thinking of buying.

Car payment/financing. While the AAA study uses financing charges, our calculator uses your monthly car payment (which includes principal plus interest costs). If you're trying to estimate the payment amount for a car, an auto loan calculator can help.

Insurance. Enter the monthly insurance premium you pay. Alternatively, if you're car shopping, you can get a car insurance quote or estimate using a car insurance calculator.

Fuel. Here are some approaches for figuring fuel costs.

• For a gas car, divide the number of miles you drive monthly by the car's fuel economy rating on fueleconomy.gov and multiply by the price per gallon of gas in your area.

• To estimate monthly EV charging costs, divide your monthly miles by 100. Multiply that number by your car’s kWh per 100 miles (from fueleconomy.gov or the EV window sticker) and then by your electricity cost per kWh — for example, 1,000 miles ÷ 100 × 30 kWh × $0.15 = $45.

Maintenance and repairs. For a car you own, you can track your average monthly maintenance costs in the past year. For future maintenance, use the vehicle's service and maintenance schedule to apply rough estimates. If you don't yet own the vehicle, most auto manufacturers have owners manuals with schedules online. Unexpected repairs are difficult to predict, but if you want to account for that, add a bit extra to your estimate. Also, consider that some repairs may be covered if the car is still under warranty.

Registration, fees, taxes, miscellaneous. For a car you plan to purchase, get an estimate from your local department of motor vehicles (DMV). Some DMVs have calculators on their websites to provide an estimate. Add any other recurring expenses, such as parking costs.

Depreciation. While understanding how your car depreciates is important, average depreciation isn't included in our total monthly car cost calculator.

*Note: See our methodology below.

While the AAA Your Driving Costs study looks at car costs annually, the cost of owning a car fluctuates from month to month as prices among cost categories change. NerdWallet's auto ownership index measures these changes over time using inflation and spending figures from the Bureau of Labor Statistics.

By reviewing the total cost of ownership, you can see the portion of your income that goes toward your car each month. It’s best to spend less than 15% to 20% of your take-home pay on vehicle costs, if possible.

If you need to adjust your car ownership budget, start with these items that may give you more control.