AAA: Low Gas Prices Drive Lower Overall Car Ownership Costs
Despite a recent rebound, fuel prices remain low, and they’re driving down overall car ownership costs, according to AAA’s annual “Your Driving Costs” study. Nationwide, a gallon of gas is still more than $1 cheaper than it was a year ago, and that, plus cheaper financing, drove ownership costs for the average sedan down to $8,698. That’s $178, or about 2 percent, less than it was a year ago, AAA says.
Related: AAA: Distracted Teen Driving Worse Than We Thought
Ownership costs didn’t come down without a fight. Were it not for cheap gas and lower-interest loans, a litany of other factors would have raised the costs this year:
- Depreciation, which accounts for the lion’s share of annual ownership costs ($3,654 or 42 percent), increased $144. Blame more new-car sales, AAA says, which have increased the supply of used vehicles.
- Auto insurance ($1,115 or 12.8 percent of ownership costs) went up $92. That’s based on premiums for good drivers, but AAA suspects it’s because higher-tech vehicle components and materials drove up repair costs.
- Maintenance and tires (a combined $914, or 10.5 percent) increased $9.
- Regulatory fees like licenses, registration and taxes (a combined $665, or 7.7 percent) increased $24 due to higher vehicle prices and higher fees in certain states, AAA says.
Had finance charges and fuel prices stayed the same, the other pieces of the pie would have driven annual ownership costs up by some $270. Fortunately, those two slices account for a large chunk of ownership costs (27 percent), and they fell by double-digit percentages. Finance charges ($669 or 7.7 percent of ownership costs) fell $178, while gas ($1,682 or 19.3 percent) fell $269.
AAA calculated annual driving costs over 15,000 miles per year in small, midsize and large sedans to arrive at its overall average. The agency also calculated rates for minivans and four-wheel-drive SUVs, finding both segments fell even more (4 percent) in annual driving costs than sedans.
