The average annual cost to own and operate a new vehicle is $12,863, according to AAA’s newest Your Driving Costs analysis. This reflects the higher cost of fuel, depreciation and finance charges.
In response to the growing share of electric vehicles in the new car market, this year’s Your Driving Costs analysis added some popular EVs and hybrids into standard vehicle categories that previously listed only gasoline-powered models.
“By including EVs, hybrids and traditional gasoline-powered vehicles within the same categories, consumers can more easily compare total ownership costs across powertrains,” said Jillian Young, director of public relations for AAA Northeast. “Looking at the full ownership picture — including depreciation and other expenses — can help consumers better understand the true total cost of purchasing a new vehicle.”
Greenwich Avenue. Photo: Leslie Yager
Key Cost Factors
• Fuel Prices — Gasoline prices are up significantly this year, with a national average of $4.15 per gallon of regular at the time of the study. That price is nearly 32% higher than 2025. Electricity for home EV charging averaged 18 cents per kilowatt hour, about 8% more than a year ago, improving the relative affordability of EVs and hybrids given the larger increase in gas prices. But fuel economy was far from the most important factor in determining the most affordable vehicle to own.
• Depreciation — The difference between a car’s purchase price and resale value remains the single largest ownership cost, with vehicles losing an average of $4,422 per year. Electric vehicle buyers should prepare themselves for a rapid and significant loss of value on their new wheels. EV medium sedans had about twice the depreciation of gasoline-powered models, helping push total ownership costs 29% higher in that category.
• The Price — The average retail price of a new vehicle this year is $39,376. While manufacturer’s suggested retail prices have increased slightly, incentives, demand and rebates can affect what consumers actually pay. The final purchase price is used to calculate finance costs and depreciation.
EV and Hybrid Comparison Takeaways
By comparing select electric and hybrid models within the same categories as gas-powered vehicles, AAA gives shoppers a more practical view of how their ownership costs compare.
• Gas-powered vehicles: Overall, gas models offered savings compared to EVs and hybrids in cost categories affected by purchase price, like finance charges, taxes and fees, and depreciation. For example, gas-powered medium sedans cost $10,582 per year to own, $3,080 less than comparable EV medium sedans, which had significantly higher depreciation, fees and finance costs.
• Electric vehicles: EVs delivered the lowest fuel costs, with charging costs for EVs between 66% and 70% lower than fuel for traditional gas vehicles across the categories studied. However, those savings were often outweighed by higher depreciation, fees and finance costs. For example, EV medium sedans cost 29% more to own annually than gas-powered models.
• Hybrids: Hybrids were the most consistently lower-cost alternative to gasoline powered models in the comparison categories. They combined meaningful fuel savings with smaller ownership-cost tradeoffs, costing less annually than gas-powered medium sedans, compact SUVs, medium SUVs and pickup trucks.
Car Buying Advice
Vehicle category makes a major difference in operating expenses. A half-ton pickup costs $1.10 per mile to operate — 48 cents more than small sedans — adding an average of $7,191 per year. In comparison, purchasing an EV may help offset annual fuel costs, but higher depreciation can increase total ownership costs over time. Choosing a vehicle that best fits actual transportation needs can help buyers manage long-term spend.
• Vehicle shoppers should create a monthly and annual budget that includes ownership and operating costs before purchasing.
• Keep the vehicle price, finance rate and trade-in value as separate negotiations.
• Get preapproved by a financial institution, such as a bank, credit union or AAA, before discussing financing with the dealer.
The Your Driving Costs calculator helps shoppers compare ownership costs by vehicle category, powertrain, location and driving habits.
Methodology and Overall Analysis
AAA’s Your Driving Costs analysis estimates the cost of owning and operating a new vehicle for personal transportation over five years and 75,000 miles. Actual driving costs vary based on driving habits, location, operating conditions and other factors.
AAA evaluated seven vehicle categories and 34 top-selling models across fuel, maintenance, repair and tire costs as well as license, registration and taxes, depreciation and finance charges.
EV and Hybrid Cost Comparisons
For EV and hybrid comparisons, AAA evaluated selected top-selling models in four categories — medium sedans, compact SUVs, medium SUVs and pickup trucks — alongside gas-powered models to show how ownership costs vary by powertrain within the same vehicle categories.
For a full breakdown of the methodology and cost comparisons, download and review the Your Driving Costs fact sheet and brochure.
AAA Northeast is a not-for-profit auto club with offices in Rhode Island, Massachusetts, Connecticut, New Jersey, New Hampshire and New York providing more than 6.9 million local AAA members with travel, insurance, financial and auto-related services.