What is the Cost of Owning and Operating a Car in 2016?
A recent study was published on car ownership costs and auto expense costs called the AAA’s 2016 Your Driving Costs study.
It reports that overall driving costs have hit a six year low in 2016. Car drivers will spend .57 cents for each mile driven, this equates to approximately $713 per month. This figure includes expenses to cover both the fixed and variable costs that come with owning and driving a car.
The reason why we see the cost to own and operate a vehicle is primarily due to lower gas prices. John Nielsen is AAA’s managing director of Automotive Engineering and Repair stated:
“Thanks to lower gas prices, American drivers can expect to save hundreds of dollars in fuel costs in 2016. Fortunately, this annual savings more than offsets the moderate increases in maintenance, insurance, finance charges and other costs associated with owning and operating a vehicle.”
Here is the breakdown you can expect for your car based on vehicle type. These auto expenses are based on 15,000 miles and are for the total annual cost.
- Sedan Average: $8,558 ($0.5705/mile)
- Small Sedan: $6,579 ($0.4386/mile)
- Medium Sedan: $8,604 ($0.5736/mile)
- Large Sedan: $10,492 ($0.6994/mile)
- SUV (4WD): $10,255 ($0.6837/mile)
- Minivan: $9,262 ($0.6175/mile)
Vehicle maintenance costs approximately 5.28 cents per mile/$792 per year. This is an increase of $25 over 2015 auto expense costs. This varies wildly among different cars. Engines are getting more complex, and labor shop rates are on the rise. It makes financial sense to get an auto expense protection plan to cover mechanical repairs, electrical repairs, oil changes, transmission repair, brake service, parts or new tires (tires add up to 1.00 cent per mile which is about $150 per year).
Image via Flickr by Werner Bayer
Insurance rates average about $1,222 per year and that number varies depending on a multitude of factors like insurance company, region, driving record etc. The insurance estimates are based on good drivers. This expense has been increasing. Rising costs are likely attributable to lower gas prices, which have resulted in more miles driven, greater numbers of collisions and higher insurance payouts.
A recent survey conducted by the AAA discovered that 35% of Americans have skipped or delayed maintenance or repairs that were recommended by a mechanic or specified by the vehicle’s factory service schedule.
Don’t wait for your car to break down, keep proactive with your car maintenance and vehicle repairs so you don’t get stuck on the side of the road in the middle of the night.
The 2016 Your Driving Costs study analyzes the cost to own and operate a car in the United States. The fixed ownership costs which are used for these calculations include insurance, license and registration fees, taxes, depreciation and finance charges. Variable operating costs considered in the study include fuel, maintenance and repair, and tires. The ownership costs are figured based on buying a new vehicle that is driven over five years and 75,000 miles. Keep in mind that your actual operating costs may vary.
