The new car ownership cost has eased this year, offering some relief to drivers. The American Automobile Association (AAA) estimates the annual expense at $11,577, or about $964.78 per month, based on 15,000 miles driven per year. That is $719 less per year, or $60 less per month, than last year.
AAA attributes the decline to a mix of slower depreciation, reduced financing charges, falling fuel prices, and buyers favoring more affordable vehicles. Depreciation had the biggest effect: average annual depreciation fell to $4,334, down from $4,680 last year. AAA said this reflects expectations that rising new-car prices and tariffs could support used-car values, easing depreciation losses.
Financing expenses—including loan fees and interest—also decreased. Average annual financing costs dropped to $1,131, down 15% from $1,332 last year. Even with the improvement, AAA advises shoppers to total every ownership expense before committing.
The new car ownership cost varies widely by vehicle type. Full-size pickup trucks average $14,781 per year, compared with $9,956 for a midsize sedan—a difference of $6,402 (43.3%). Compact SUVs average $10,279 annually, and midsize SUVs average $12,584.
AAA recommends setting a budget before shopping; negotiating vehicle price, auto-loan rate, and trade-in value separately; securing pre-approval with a lender; and exploring multiple sources when buying used. Shoppers who match the vehicle to their actual needs can capture more of the savings created by today’s lower new car ownership cost.
Costs could shift again. Austin Seavers, an automotive engineer at AAA, said, “It’s unclear whether expenses will continue to fall next year. Fuel prices, interest rates, and other variables could change the outlook significantly.”
BY HOONSIK WOO [woo.hoonsik@koreadaily.com]
