AAA Does the Math on the Cost of Automobile Ownership

Cost of Automobile OwnershipIt’s gotten a lot more costly to own and operate an automobile in recent years. That’s the clear conclusion one can draw from an evaluation done by the American Automobile Association.

The latest AAA analysis, based on a survey of driving costs it conducts annually, has determined that the “average car” (a midsize sedan) costs nearly $9,000 each year to keep fueled, licensed, insured and maintained.

That’s $750 per month – hardly chump change.

Not surprisingly, the cost of fuel is the biggest culprit in the upward trajectory of costs. Fuel prices have risen most dramatically in the past year.

But that’s not the only source of added expense; AAA found other items that have also contributed to higher costs, rising higer than the rate of inflation though not as sharply as gasoline:

  • Fuel cost: Up ~15% over the past year
  • Replacement tires: ~4% increase
  • Automotive insurance: ~4% increase

The typical American motorist is now spending ~$1,000 per year on automotive insurance, AAA finds.

But there are wide swings in the cost per motorist based on driving records, the type and age of the vehicle, the geographic location and so forth, so some lucky souls are paying only half the average.

Another finding: Today’s more sophisticated motor vehicles make them more complicated to service – thus increasing the time it takes to repair them. Time is money – and never more so as when a car is in the service bay!

The only category where cost reductions have been observed lately is in automobile depreciation, which is lower by about 5% compared to last year.

The reason? Reduced new car sales have resulted in a relative shortage of quality used cars available for sale, thereby driving up their value.

As an interesting aside, AAA has been conducting these surveys each year since 1950. Sixty years ago, motorists typically put ~10,000 miles on their cars, and fuel cost just 27 cents per gallon.

Today, the average motorist clocks ~15,000 miles on his or her vehicle in a year’s time. And, as we know all too well, fuel costs have been bounding around between $3.50 and $4.00 per gallon.

Oh, for the good ol’ days … even just five years ago!