Ask a driver what their car costs and most will name the monthly payment or the weekly fill-up. The real figure is much larger, because the biggest costs are spread out, paid once a year, or never paid in cash at all.
The average, according to AAA
AAA’s 2026 Your Driving Costs study puts the average cost of owning and operating a new vehicle at $12,863 a year, about $1,072 a month, based on 15,000 miles a year. That works out to roughly 86 cents a mile. AAA changed its method this year, so it advises against comparing the figure directly with last year’s.
The study counts six kinds of cost:
- Depreciation: the value the car loses each year. The largest single cost, about $4,422 a year on average in the 2026 study.
- Finance charges: interest on the loan.
- Fuel or charging.
- Insurance.
- Maintenance, repairs and tires.
- License, registration and taxes.
What the averages leave out
Studies like AAA’s cover the core costs of a new car. Real life adds more, and these smaller items add up:
- Parking, at home, at work and in town
- Tolls
- Car washes and detailing
- Tickets and fines
- Accessories, floor mats, phone mounts, roof racks
- Roadside assistance memberships
For a used car, the mix shifts: depreciation is lower, while repairs usually take a bigger share.
Depreciation is real even though you never pay it
You do not write a check for depreciation, which is why it is easy to ignore. You pay it when you sell or trade in. A car bought for $35,000 and sold five years later for $15,000 cost $4,000 a year before a single gallon of fuel. Keeping a car longer, buying lightly used, and maintaining it well with records to prove it all reduce this cost. See how a service history affects resale.
How to find your own number
- Log every cost as it happens, with a category: fuel, service, insurance, parking and so on.
- Spread big annual bills. Insurance and registration paid once a year belong to the whole year, not to one month.
- Note your mileage. Cost per mile only makes sense against miles actually driven.
- Divide. Total cost for the year divided by miles driven gives your cost per mile.
Cost per mile is the most useful number you can have. It tells you whether a second car is worth keeping, whether an electric car would save money for your driving, and what a road trip really costs. Fuel’s share alone is easy to work out with our fuel economy calculator.
Where to cut first
- Insurance: shop around at renewal and check your deductibles.
- Fuel: correct tire pressure, smoother driving and fewer short trips. Measure the effect with real fuel economy.
- Maintenance: follow the manual, not upsells. Preventive work is cheaper than repairs.
- Depreciation: keep the car longer and keep its records.
Keep it in one place
In Badger’s expenses, fuel and charging, workshop visits and any other cost you add land in one list. You see what you have spent this year by category, and what the car costs per year and per mile. With Badger Pro you can also compare cars in your garage and see ownership cost over the car’s whole life.
Common questions
What is the biggest cost of owning a car?
For a new car, depreciation. In AAA’s 2026 study it averaged about $4,422 a year, more than any other category.
Are electric cars cheaper to own?
They usually cost less to fuel and maintain, but depreciation and insurance can be higher. In AAA’s 2026 study, hybrids cost less per year than their gas versions in several vehicle classes. The answer depends on the model and how you charge.
How much should I budget per month?
AAA’s average is about $1,072 a month for a new car at 15,000 miles a year. Your own log will tell you your actual figure within a few months.
