Do you know what it costs to own an auto every year? AAA studies show it's over $9,000 per year on average! Calculate the costs of your own personal auto using this free spreadsheet.

How Much is Owning an Auto Really Costing You?

Do you know what it costs to own an auto every year? AAA studies show it's over $9,000 per year on average! Calculate the costs of your own personal auto using this free spreadsheet.

Despite the fact that my husband is in the automotive industry (the sole reason we live in Michigan), I really am not very fond of cars.  I don’t love to drive them, buy them, or maintain them and my dreams don’t involve fancy cars.  In fact, I went an entire year without owning or driving a car while living in China.  We had a personal driver provided by my husband’s company during our assignment there and I did not miss driving at all.    Even better was the cost aspect: we had sold our cars before we moved and we spent less than $20 in un-reimbursed transportation costs that entire year. It. Was. Awesome.


While not owning a car is probably not an option for you (and unfortunately neither is it for me anymore!), having a realistic view of how much it actually costs to own a car can help you in making decisions about:

  • Which car to purchase (of course larger, less fuel-efficient cars will cost more to operate)
  • Whether it’s actually worth it to have more than one car for your family (or more than two for a lot of people with teenagers that are driving age)
  • Whether the cost of taking public transit, where available, outweighs the cost of driving to work
  • How much that road trip is really costing you if you’re comparing it to airplane travel (consider using the per mile costs listed below for an estimate!)
  • Housing and whether living closer to work will really significantly reduce expenses. This includes fuel but also you will receive a significant benefit from lower insurance, lower maintenance and repair costs and less depreciation on the vehicle.
  • The amount of benefit you get from having a company car provided if you’re choosing between job offers or career changes


There are a lot more costs involved in owning an auto than just monthly payments on a loan (if you have one), gas and regular oil changes.  AAA conducts a study each year titled “Your Driving Costs” that totals the annual cost to own and operate a vehicle.  Check it out here.

In summary, the 2016 study has found that the average costs per mile to own a vehicle driven 15,000 miles per year are:

  • Small sedan: $6,579 per year or 43.9 cents per mile
  • Medium sedan: $8,604 per year or 57.4 cents per mile
  • Large sedan: $10,492 per year or 69.9 cents per mile
  • SUV-4WD: $10,255 per year or 68.4 cents per mile
  • Minivan: $9,262 per year or 61.8 cents per mile


A great source to compare how much a vehicle will cost you to own is’s True Cost to Own® calculator.  They take into account the total costs over 5 years, with one of the most helpful aspects of the calculator being the calculation of depreciation.  Different vehicles will have not have the same values after 5 years even if purchased at the same initial price, due to the varying market value for used cars.  This is something most people don’t consider when buying a new or used car but definitely should!  Your car is NOT an investment, but you can minimize the cost by buying a car with a better resale value.  If you are comparing different cars to purchase, an additional resource on this website is the Car Comparison tool where you can enter several different autos to compare and then scroll down to the “5-Year Ownership Costs” section to get this same cost information for all vehicles you’re considering.  Kelly Blue Book also has a similar online tool that you can use to compare the costs of owning an auto.

I’ve also included a spreadsheet at the bottom of the post that calculates the ownership costs on a slightly different basis, using actual cash paid each year from the initial cash outflow to the cash inflow from selling the vehicle instead of including depreciation as an annual cost.


Let’s take an example of someone wanting to buy a used 2013 Chevrolet Equinox.  The True Cost to Own® calculator estimates that the price will be around $16,780, but the cost to own over 5 years will be nearly double that at $30,869.  Here is a screenshot that shows the summary of these estimates:

Example of True Cost to Own Calculator on

Let’s break down these costs so you can look at your own car(s) and calculate how much they cost you every year.


Unless you have a classic car that you’ve restored and is sitting under a cover in your pristine garage, your car is not an investment and is losing value day by day.  This amount that your vehicle loses its value is referred to as depreciation.  Cars have a limited life and depreciation reflects this.

To estimate the depreciation cost for your vehicle for a year, take the beginning of year value and subtract the estimated trade-in value at the end of the year (online tools such as the website above can help you calculate this).

How to minimize depreciation costs: Purchase a car with a high re-sale value and minimize the amount of miles you put on it by living close to work and school if possible.  Ride a bike or walk to errands when possible and your health will also improve!


In most states, buyers are required to pay sales tax on the purchase price of their vehicle and then annual registration fees to the state each year.

How to minimize taxes & fees: Unless you live in a state without a sales tax (lucky duck!), there’s not a lot you can do to minimize your sales tax on the vehicle.  If you avoid purchasing a vehicle often, it will help to reduce this cost, which adds nothing of value to you.  Depending on your state, driving a less expensive vehicle can result in lower registration fees as well.


Financing a vehicle generally comes with monthly interest payments in addition to paying back the cost of the vehicle unless you’ve received a promotional 0% financing deal (on a new car).  The interest portion of your payment has no benefit to you and is simply money you are paying to the bank to be able to buy the car without using your own cash.  An amortization schedule can help you to see how much of your payments you’re paying toward the actual cost of the vehicle and how much goes to interest payments to the bank.

How to minimize finance costs: Pay cash for your vehicle and you’ll skip these costs entirely.  At the least, if you need to finance most or part of the vehicle’s cost make sure you do your research to make sure you are getting the best interest rate possible, the lowest time period that you can afford (5 years maximum) and also make sure that you don’t have any prepayment penalties on your loan.


Gas prices have been fluctuating so much over the past year that it’s anyone’s guess how much fuel costs will be in the future.  However, if you have a good handle on your budget, you likely know how much you currently spend on gas each month and can estimate an entire year based on that.  Don’t forget to include road trips you regularly take in the calculation of fuel for the year.

How to minimize fuel costs: Let your car sit in your garage and walk or ride your bike!  Okay, okay… that’s not often possible if you don’t live in the city, but you can try to group errands that you need to run together and consider housing options that are closer to work and school.


As we discussed in the IN201: Auto Insurance Basics class, auto liability insurance is mandatory in nearly every state.  Depending on the make and model of your vehicle, you may be paying a significant amount to insure your car(s).

How to minimize insurance costs: See the class about auto insurance basics for more about what factors influence your insurance rates.  The key is to do your research and be a safe driver!


Every auto manufacturer includes a list in the owner’s manual of routine schedule maintenance that should be performed on a regular basis to keep your car running smoothly.  This includes oil changes, tire rotations, air filters, fluid changes and other maintenance.

How to minimize maintenance costs: Doing regularly scheduled maintenance yourself can result in a significant cost savings over the life of your vehicle.  Not doing regularly scheduled maintenance will save you money in the short-term but definitely not in the long-term so don’t take that option!


Repairs, unlike maintenance, are expenses to fix mechanical problems.  While repair costs can be minimized by performing regularly scheduled maintenance, all vehicles will eventually have parts that wear out and need to be replaced.  And of course, the older the car the more repairs it will require.

How to minimize repair costs: Regularly maintaining your vehicle and taking it in at the first warning signs that there may be something amiss will help to reduce repair costs.  Learning how to do some minor repairs yourself can also save you a lot of money (you, not me because I am not mechanically inclined…).


Well, are you ready to calculate what YOUR car is costing you each year and/or is estimated to cost over 5 years total?  If you want to figure this out as quickly as possible, go right to and check it out.  You can adjust the repairs and maintenance numbers if you are able to do your own labor and get a better idea of the total for you.  This is super helpful because you can compare it to the numbers from the AAA study.

However, I always like to look at things from a cash perspective as well.  Instead of using depreciation as an annual cost, I want to see what I’m paying in actual cash only for my auto each year and what that will look like going forward on an annual basis until I sell my car.  I’ve assumed in my example that I keep the car for 5 years before selling it.

Download the spreadsheet for Excel | Google.


In this example, I’ve assumed the following (not what I really drive):

  • Automobile: 2013 Ford Explorer
  • Purchased: May 1, 2015
  • Price Paid: $23,000
  • Cash down: $1,500
  • Financing terms: 60 months financing at 2.75%
  • Michigan sales tax 6% and $150 dealer fee + $150 registration fee
  • Driven 15,000 miles per year

I used this nifty thrifty spreadsheet I made to calculate the totals for me (click to enlarge):

Use this spreadsheet to calculate the cost to own your vehicle over 5 or more years, including purchase and selling costs.

I took the following steps for this calculation:

  1. I first entered the costs of the vehicle that were paid in cash at the time of sale, including $1,500 cash down, $1,380 sales tax, $150 registration and $150 dealership fee. Note that sometimes these amounts are financed in the cost of the loan, so check your own personal situation.  If you paid for your car with cash, enter the entire cash price here.  If you financed some of the fees (such as sales tax), they will be included in the loan amortization in step 2 instead, so only enter what you actually paid in cash.
  2. Next, I created an amortization schedule for the automobile loan to see how much of each monthly payment was going to the principal balance of the loan and how much was being paid as interest to the bank (financing costs).  As you can see in the schedule below, monthly payments on the loan are $383.94 with part of each payment going toward the cost of the car and part of each payment going to the bank as interest.  If you want additional information about amortization schedules go to the Debt Management 102 Class.  Then I totaled the cost of both principal payments and interest payments for each calendar year.

Amortization Loan Schedule for Example of Auto Ownership Costs

  1. Next, I entered the automobile information into TCO Calculator. This gave me an estimate of fuel, insurance, maintenance and repair costs estimated for the vehicle.  I adjusted these numbers to reflect doing some maintenance and repair work myself (ahem…rather my husband doing the work).

Example of True Cost to Own Calculator on

  1. Last, I estimated a selling price for the vehicle after 5 years based on the selling price less depreciation total from the calculator. In this example, the selling price was $23,000 and depreciation was estimated to be $10,756, which results in a value of $12,244.   I went with a conservative $12,000 estimate.  Note here that this 5-year estimate is 5 years from right now even though in the example the car was purchased a year ago, but it’s close enough for the cost approximation.  Be sure to enter the ending balance of your loan, which you’ll have to pay off when you sell the vehicle.  In this example, the vehicle was sold right after paying off the entire 5-year loan, but if it was sold after the 4th year, there would be a loan balance that would offset the selling price of the vehicle.

In this example, you can see that although the auto only cost $23,000 to purchase, it will end up costing over $36,000 to own and operate over a 5 year period, even after selling it for $12,000 after that time period!

Whether you drive around in a Hummer (‘Merica!) or a Smart car, taking a look at the actual cost of your car will be an eye-opening experience for you.  The tools provided here can help you to make decisions now and in the future.

What is your vehicle costing you?  Were you surprised?


3 Responses

  1. Reading this just makes me want to move back to the big city and sell both of our cars. Yikes.

  2. Where I live, having a car really isn’t optional, but my wife and I share one (small, fuel-efficient) car and drive it as little as possible. But I was still surprised at how much it’s costing us!



I’m Kathryn Hanna-wife, mother of 3 and a Certified Public Accountant. I love to budget (really, I do!) , build spreadsheets and spend money on travel, sewing supplies and good chocolate.


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