The short answer
The average cost of owning a car in the US is $12,863 a year for a new vehicle, or about $1,072 a month, according to AAA’s 2026 Your Driving Costs study. Depreciation is the biggest single expense, followed by fuel and insurance. Meanwhile, the average new-car loan payment has climbed to a record $787 a month.
- Per month: $1,071.92 for a new vehicle driven 15,000 miles a year (AAA 2026).
- Per mile: about 86 cents, or $35.24 a day.
- Biggest cost: depreciation at $4,422 a year on average.
- Cheapest to own: small sedans ($9,259 a year); half-ton pickups cost the most ($16,449).
- Best value powertrain: hybrids beat gas models in all four categories AAA compared.
$12,863
Average yearly cost of a new car (AAA 2026)
$1,072
Average monthly cost of owning a new car
$787
Average new-car loan payment, Q3 2026 (Edmunds)
$4,422
Average yearly depreciation
In this article
The true cost of owning a car is far more than the sticker price or the monthly payment. It is the total cost of ownership: every dollar you spend to buy, insure, fuel, register, finance and maintain a vehicle, plus the value it loses while you own it. In this guide, we break down each of those costs with the newest data available in fall 2026, so you can see where your money actually goes.
Our main source is AAA (the American Automobile Association, the nonprofit motor club), which publishes its Your Driving Costs study every year. AAA released the 2026 edition on September 15, 2026. It averages costs over five years and 75,000 miles for 34 top-selling 2026 models across seven vehicle categories, according to the AAA newsroom. We also use loan data from Edmunds and Experian, plus current fuel prices from the U.S. Energy Information Administration.
What Is the Average Cost of Owning a Car in 2026?
The average cost of owning a car in 2026 is $12,863 a year for a new vehicle driven 15,000 miles annually. That works out to $1,071.92 a month, $35.24 a day and roughly 85.75 cents per mile, based on the AAA 2026 study.
However, AAA warns that you should not compare this figure directly with its 2025 estimate of $11,577. The 2026 study changed its method, and for the first time it included selected electric and hybrid models alongside gas vehicles in its standard categories. So the jump partly reflects a new mix of vehicles, not only rising prices.
Also, keep in mind what the number covers. AAA prices a new vehicle with a sales-weighted average MSRP of $39,376, financed and fully insured. Real-world prices sit higher: the Kelley Blue Book average transaction price for a new vehicle was $50,562 in September 2026, according to Cox Automotive. As a result, many buyers will spend more than the AAA average.
Average cost of owning a car per month, per day and per mile
| Driving distance | Cost per year | Cost per month | Cost per day | Cost per mile |
|---|---|---|---|---|
| 10,000 miles a year | $10,992 | $916 | $30.12 | $1.10 |
| 15,000 miles a year | $12,863 | $1,072 | $35.24 | $0.86 |
| 20,000 miles a year | $14,799 | $1,233 | $40.54 | $0.74 |
Notice that the cost per mile falls as you drive more. That happens because fixed costs such as insurance, registration and finance charges stay the same, so they spread across more miles.
Where Does the Money Go? The Full Annual Breakdown
Ownership costs, the ones you pay even if the car sits in the driveway, make up about two-thirds of the total. Operating costs, which rise with every mile, make up the rest.
| Cost category | Average per year | Share of total | Type |
|---|---|---|---|
| Depreciation | $4,422 | 34% | Ownership |
| Fuel (about 17.32 cents per mile) | $2,598 | 20% | Operating |
| Full-coverage insurance | $2,098 | 16% | Ownership |
| Maintenance, repairs and tires (about 11.73 cents per mile) | $1,758 | 14% | Operating |
| Finance charges | $1,184 | 9% | Ownership |
| License, registration and taxes | $802 | 6% | Ownership |
| Total | $12,863 | 100% | — |
Depreciation: the cost you never see on a bill
Depreciation is the value your car loses over time, and it is the largest cost of ownership at $4,422 a year in the AAA weighted average. Because you only feel it when you sell or trade in, most drivers underestimate it. Notably, the loss varies by vehicle: AAA puts it at $2,745 a year for small sedans but $6,248 for half-ton pickups.
Fuel: up sharply in 2026
Fuel is the second-largest cost. AAA’s study assumed regular gasoline at $4.152 a gallon, which was 31.8% higher than in its 2025 study. Since then, prices have risen further: the EIA weekly survey put the US average for regular gas at $4.331 a gallon on October 12, 2026. Therefore, if you drive a gas car today, your fuel bill is likely a little above the AAA estimate.
Insurance, finance charges and fees
Full-coverage insurance averaged $2,098 a year in the 2026 study, while finance charges averaged $1,184 and license, registration and taxes added $802. In addition, these fixed costs depend heavily on where you live, your credit and your driving record, so your own numbers can differ widely.
What Does Each Vehicle Type Cost to Own?
The type of vehicle you choose matters more than almost anything else. In the AAA study, a small sedan cost $9,259 a year to own and drive, while a half-ton pickup cost $16,449, a gap of about $7,191 a year.
| Vehicle type | 10,000 miles a year | 15,000 miles a year | 20,000 miles a year |
|---|---|---|---|
| Small sedan | $7,727 | $9,259 | $10,844 |
| Medium sedan | $9,006 | $10,555 | $12,167 |
| Subcompact SUV | $9,081 | $10,752 | $12,477 |
| Compact SUV | $10,065 | $11,670 | $13,338 |
| Midsize pickup | $10,952 | $13,089 | $15,290 |
| Medium SUV | $12,397 | $14,447 | $16,562 |
| Half-ton pickup | $14,152 | $16,449 | $18,826 |
| Weighted average | $10,992 | $12,863 | $14,799 |
For example, choosing a compact SUV over a medium SUV saves about $2,777 a year at 15,000 miles. Similarly, a medium sedan costs roughly $1,115 a year less than a compact SUV. Those gaps add up to thousands over five years of ownership.
Pro tip. Before you shop, decide which vehicle class you truly need. Moving down one size class often saves more each year than haggling over the price of a single model.
What Is the Average Car Payment Right Now?
The average new-car loan payment hit a record $787 a month in the third quarter of 2026, according to Edmunds data reported by CBT News. That was up from $777 in the second quarter and $756 a year earlier.
Edmunds, the car-shopping research site, also found that buyers financed a record average of $44,664, with the average APR holding at 7.0%. Meanwhile, loans of 84 months or longer made up a record 25.5% of financed new-car purchases, and 21.2% of buyers agreed to payments of $1,000 or more a month.
| Measure (new vehicles) | Q3 2026 | Q2 2026 | Q3 2025 |
|---|---|---|---|
| Average monthly payment | $787 | $777 | $756 |
| Average amount financed | $44,664 | $44,156 | $42,744 |
| Average APR | 7.0% | 7.0% | 7.0% |
| Share of loans 84 months or longer | 25.5% | 23.9% | 21.8% |
| Average total interest over the loan | $9,938 | $9,811 | $9,442 |
| Average down payment | $5,554 | $5,815 | $6,021 |
Average car payment for new vs used cars
Experian, the credit bureau, tracks payments across all lenders. In its second-quarter 2026 data, the average car payment was $765 for a new vehicle and $542 for a used one. The average loan was $43,610 for new cars and $27,852 for used cars.
How your credit score changes your rate
| Credit score range | New car APR | Used car APR |
|---|---|---|
| Super prime (781–850) | 4.41% | 6.29% |
| Prime (661–780) | 6.15% | 8.81% |
| Near prime (601–660) | 9.71% | 13.93% |
| Subprime (501–600) | 13.52% | 19.10% |
| Deep subprime (300–500) | 16.11% | 21.62% |
Watch out. A long loan lowers the monthly payment but raises the total interest you pay. In addition, a long term makes it more likely you will owe more than the car is worth if you sell early.
Gas vs Hybrid vs Electric: Which Costs Least to Own?
Hybrids were the cheapest to own in 2026. In AAA’s side-by-side comparison, hybrids cost less than gas versions in all four categories it tested, while electric vehicles (EVs) usually cost more overall because of steeper depreciation and higher finance charges.
| Category (15,000 miles a year) | Gas | Hybrid | Electric |
|---|---|---|---|
| Medium sedan | $10,582 | $10,204 | $13,662 |
| Compact SUV | $11,656 | $11,201 | $11,888 |
| Medium SUV | $14,431 | $13,698 | $14,332 |
| Pickup truck | $16,626 | $16,117 | $17,414 |
Still, EVs had by far the lowest fuel costs. AAA found home charging cost about 66% to 70% less than gasoline, with electricity averaging 18 cents per kilowatt-hour. For instance, fuel for an electric medium sedan cost $712.50 a year versus $2,215 for the gas version. However, the electric sedan lost $6,786 a year to depreciation, about twice as much as the gas model.
If you are weighing an EV, our guide to the best electric cars of 2026 compares range, reliability and prices model by model.
What Hidden Costs Do Most Drivers Forget?
The biggest hidden expense of car ownership is depreciation, followed by loan interest and taxes and fees. These costs rarely appear in a monthly budget, yet together they made up roughly half of AAA’s 2026 total.
- Depreciation: $4,422 a year on average, and much more on pickups and many EVs.
- Lifetime interest: the average new-car loan now carries $9,938 in total interest, per Edmunds.
- Taxes and fees: license, registration and taxes averaged $802 a year, but half-ton pickups averaged $1,078.
- Fuel price swings: gas rose from the $4.152 AAA assumed to $4.331 by mid-October 2026.
- Costs AAA leaves out: parking, tolls, car washes and tickets are not in the study, so add your own estimates.
In other words, the payment on your loan statement covers only part of the bill. That is why a car that looks affordable at the dealership can still strain a budget later.
How Do You Calculate the True Cost of Owning a Car?
To calculate the true cost of car ownership, add your yearly ownership costs to your yearly operating costs. The steps below follow the same method AAA uses, so you can compare your result with the national average.
- Depreciation: subtract the expected resale value after five years from the purchase price, then divide by five.
- Insurance: use your actual annual premium for full coverage.
- Finance charges: take the total interest on your loan and divide by the loan term in years.
- License, registration and taxes: add your state fees and any personal property tax on the vehicle.
- Fuel: divide your yearly miles by your fuel economy, then multiply by the local price per gallon or per kilowatt-hour.
- Maintenance and tires: budget from the owner’s manual schedule; AAA’s average was 11.73 cents per mile.
- Divide the total by 12 for a monthly figure, or by your miles for a cost per mile.
A quick worked example
Say you drive 12,000 miles a year in a car that gets 30 mpg, and gas costs $4.33 a gallon. First, 12,000 divided by 30 equals 400 gallons. Next, 400 gallons times $4.33 equals about $1,732 a year for fuel. Then add insurance, depreciation, interest, fees and maintenance in the same way to reach your full yearly total.
How Can You Lower the Cost of Owning a Car?
The fastest ways to cut car costs are to buy the right size of vehicle, borrow for less time at a lower rate, and keep fixed costs such as insurance under review. Here are the moves that matter most, based on the data above.
1. Choose the vehicle class carefully
Vehicle class drives the biggest differences in AAA’s data, so start here.
- Saving potential: about $7,191 a year between a half-ton pickup and a small sedan.
- Consider a hybrid: hybrids had the lowest total cost in every category AAA compared.
- Watch depreciation: research resale values before you buy, not after.
2. Get pre-approved before you visit a dealer
AAA recommends getting financing approval from a bank, credit union or AAA before you discuss financing with a dealer.
- Why it helps: you can compare the dealer’s offer against a rate you already hold.
- Negotiate separately: AAA advises negotiating price, finance rate and trade-in value one at a time.
- Shorter terms: a shorter loan usually means less total interest, even if the payment is higher.
3. Shop your insurance at each renewal
Insurance is the third-largest cost at $2,098 a year, and premiums vary widely between insurers.
- Compare quotes: get several quotes for the same coverage before you renew.
- Check your deductible: a higher deductible lowers the premium but raises what you pay after a claim.
- Ask about discounts: bundling, safe-driver and low-mileage programs can apply.
4. Follow the maintenance schedule in your manual
Maintenance and tires averaged 11.73 cents per mile in 2026, so skipping or overdoing service both cost money.
- Use the manual: follow the maker’s schedule rather than generic service reminders.
- Check tire pressure: correct pressure helps tires last and supports fuel economy.
- Fix small problems early: minor repairs are cheaper than the damage they can cause later.
Claim the new car loan interest deduction
If you financed a new car in 2025 or later, you may be able to deduct up to $10,000 a year in loan interest for tax years 2025 through 2028, according to the IRS. The vehicle must be new, for personal use and have final assembly in the United States, and the loan must have started after December 31, 2024.
- Who qualifies: both itemizers and non-itemizers can claim it.
- Income limit: the deduction phases out above $100,000 of modified adjusted gross income, or $200,000 for joint filers.
- Not eligible: used vehicles and lease payments do not qualify.
- Paperwork: you must include the vehicle’s VIN on your return. You can check where a car was assembled with the NHTSA VIN decoder.
For instance, a buyer in the 22% tax bracket who pays $1,500 in qualifying interest in a year could lower their federal tax by about $330. Your result depends on your income and tax situation, so check with a tax professional.
Finally, set aside money for surprise repairs. A dedicated car fund, or a solid emergency fund, keeps a breakdown from turning into credit card debt. Prices may also keep moving, so our look at US tariffs and everyday prices is worth a read.
Our verdict
Owning a new car in the US now costs about $12,863 a year, or roughly $1,072 a month, and the true bill can be much higher for pickups and large SUVs. Depreciation, fuel and insurance do most of the damage, while long loans quietly add thousands in interest.
So the smartest savings happen before you buy: pick the smallest vehicle that meets your needs, consider a hybrid, get pre-approved for a loan, and keep the term short. After that, shop your insurance every year and claim the new loan interest deduction if you qualify.
Frequently Asked Questions
What is the average cost of owning a car per month?
The average cost of owning a new car is about $1,072 a month, according to AAA 2026 Your Driving Costs study. That figure assumes 15,000 miles a year and includes depreciation, fuel, insurance, maintenance, finance charges and fees. Drive 10,000 miles a year and the monthly cost falls to about $916, while 20,000 miles pushes it to about $1,233.
How much does it cost to own a car per year?
Owning and operating a new car costs about $12,863 a year on average, based on AAA 2026 data for 15,000 miles a year. However, the range is wide. A small sedan averaged $9,259 a year, while a half-ton pickup averaged $16,449. Your own total depends on the vehicle, your loan, your insurance rate and how far you drive.
What is the average car payment in 2026?
The average new-car loan payment reached a record $787 a month in the third quarter of 2026, according to Edmunds. Experian second-quarter 2026 data put the average at $765 for new cars and $542 for used cars. Payments keep rising because buyers are financing more, with the average new-car loan near $44,664.
What is the biggest cost of owning a car?
Depreciation is the largest expense of car ownership. AAA puts it at $4,422 a year on average for a new vehicle, about a third of the total. Because you never pay it as a bill, it is easy to overlook. Depreciation varies a lot by vehicle, ranging from $2,745 a year for small sedans to $6,248 for half-ton pickups.
Is it cheaper to own a hybrid, electric or gas car?
In 2026, hybrids were the cheapest to own overall. AAA found hybrids cost less than gas models in all four categories it compared. EVs had the lowest fuel costs, roughly 66 to 70 percent below gasoline, but higher depreciation and finance charges usually made their total cost higher. Results depend on the model and how long you keep it.
Can I deduct car loan interest on my taxes?
Yes, if you qualify. For tax years 2025 through 2028, the IRS allows a deduction of up to $10,000 a year in interest on a loan for a new, US-assembled vehicle bought for personal use. The loan must start after December 31, 2024. It phases out above $100,000 of income, or $200,000 for joint filers, and leases do not qualify.
Disclaimer: This article is for general information only and is not financial or tax advice. Costs, rates and tax rules change, and your situation is unique. Please confirm details with your lender, insurer or a qualified tax professional before making decisions.
