How to Lower the Cost of Owning a Car
Save hundreds, possibly thousands, on your annual car costs with these tips.
Do you know how much it costs to own and operate your car each year? It’s probably much more than you think: The total annual expense to keep an average car on the road in the United States in 2018 was $8,849, according to AAA’s annual Your Driving Costs study.
Even if you follow a strict budget, car payments, gas, preventive maintenance and insurance can add up—fast. Here’s a breakdown of the cost of owning a car, plus tips to help you minimize the amount you spend—both now and in the future.
The biggest cost of owning a car is one many don’t take into consideration: depreciation. It accounts for almost 40 percent of the cost of owning a new vehicle—more than $3,000 per year.
Tip 1: If you’re in the market for a new car, consider purchasing a gently used vehicle instead. Chances are you’ll find a safe, reliable vehicle at an attractive price—without the quick decline in value.
The second-biggest cost of owning a car: fuel, at nearly 20 percent of your annual bill.
Tip 2: Don’t buy premium gas unless it’s required for your vehicle. AAA tests found no benefit to using premium fuel in a vehicle designed to run on regular gas.
Tip 3: Purchase gas from a Top Tier-branded station to maximize your vehicle’s performance and fuel economy. Gasoline that meets Top Tier standards keeps an engine cleaner than other brands. Find out which brands are Top Tier.
Tip 4: Slow down. Gas mileage increases at lower speeds—even a 5 mph reduction can have a significant impact on the amount of fuel a vehicle uses.
The third-biggest cost of owning a car: preventive care and repairs, at 14 percent.
Tip 5: Act now to avoid higher repair bills in the future. Keep up to date on routine maintenance and use synthetic oil instead of conventional oil. Tests by AAA showed synthetic oil performs 47 percent better than conventional oil, providing significantly better engine protection.
Tip 6: Consider buying an electric vehicle, which boasts significantly lower fuel and maintenance costs.