(KOAM) — The price of new car ownership is continuing to climb, according to this year’s Your Driving Cost study.
The study found that the total cost to own and operate a new vehicle is on average $12,297 or $1,024.71 monthly, which is a $115 increase from 2023.
“Buying a new car can be exciting,” stated Greg Brannon, AAA’s director of automotive research. “But consumers should fully understand all the costs of owning and operating a new vehicle from purchase to resale.”
Other factors driving new ownership costs:
According to AAA:
- Car Prices—The sales-weighted average manufacturer’s suggested retail price (MSRP) for new vehicles in the study is $38,883, an increase of 0.7% over last year. It’s important to note the MSRP may not always reflect the actual purchase price and can vary based on demand. The average MSRP for each vehicle category is weighted based on its share of the total vehicle sales. This means higher-selling categories, such as pick-up trucks, have a larger impact on the average value.
- Finance Charges—A higher sticker price directly impacts finance costs, with this year’s vehicles incurring an average annual finance charge of $1,332, a 6% increase from the previous year. *Please note: Sticker price increase may be due to vehicles replaced in YDC.
AAA says hybrid vehicles have the second lowest total ownership costs behind small sedans.
“Hybrid vehicles are a reasonable, affordable option for those who want to try the benefits of electrification,” said Brannon. “Hybrids benefit from excellent fuel economy, low maintenance costs, depreciation, and insurance – making them an affordable option for car buyers.”
AAA Car Buying Advice
With higher purchase prices impacting other cost categories, it’s important to remember these car-buying tips when researching all options:
- Create a monthly or annual budget and factor in ownership and operating costs before purchase.
- Keep each transaction and negotiation separate from the other – the cost of the car, the finance rate, and the trade-in value.
- Obtain pre-approval from a financial institution (e.g., Bank, Credit Union, AAA, etc.) before discussing finance rates with the car dealer to ensure you get the best lending rate available to you.
- There are quite a few options (online and in-store) available to consumers when considering where to buy a used vehicle besides a dealership. Visit your local AAA, which may offer discounts for members.
For more information about the study or to find more advice to help you buy a car, click here.
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