ORLANDO, Fla. (April 29, 2015) — Lower gas prices and finance charges have contributed to a 2-percent drop in the annual costs of owning and operating a vehicle this year, according to AAA Inc.
The travel/insurance club estimated the annual cost has fallen to $8,698, or roughly 58 cents a mile, from last year.
AAA's 2015 “Your Driving Costs” study examined the cost of fuel, maintenance, tires, insurance, license and registration fees, taxes, depreciation and finance charges associated with driving a typical sedan 15,000 miles annually.
In the U.S., a driver can expect to spend 58 cents for each mile driven, nearly $725 per month, to cover the fixed and variable costs associated with owning and operating a car in 2015.
Tire costs rose by about 1 percent to 0.98 cents per mile/$147 per year. Due to the competitive and dynamic nature of the tire market, AAA said, tire costs in 2015 are expected to remain relatively unchanged.
“Fortunately, reduced gasoline and finance costs more than offset rising costs in other areas,” said John Nielsen, AAA's managing director of automotive engineering and repair. “As a result, car owners can look forward to saving approximately $178 this year.”
In addition to calculating the driving costs for sedans, AAA determined annual costs associated with both minivans and sport utility vehicles. Owners of these vehicles will benefit from annual driving costs nearly 4- percent lower this year, at $9,372 and $10,624 respectively, due to lower gas prices and finance rates.
“When shopping for a vehicle, smaller isn't always cheaper,” said Mr. Nielsen. “A minivan, for example, can carry up to 7 passengers, yet costs $100 less to own and operate each month compared to a large sedan.”
AAA has published “Your Driving Costs” since 1950, when driving a car 10,000 miles per year cost 9 cents per mile and gasoline sold for 27 cents per gallon.
The study's findings included:
- Fuel prices fell 13.8 percent to 11.2 cents per mile/$1,681.50 per year — a decrease of $268.50. Compared with last year's study, the average cost of regular unleaded fuel fell nearly 13 percent to $2.86 per gallon. This decline, coupled with improvements in vehicle fuel economy, resulted in an average 11.2 cents-per-mile fuel cost. Due in large part to this decrease, the cost of owning and operating a sport utility vehicle is slightly less than that of a large sedan this year, according to AAA.
- Maintenance costs edged up about 1 percent to 5.11 cents per mile/$766.50 per year. Annual maintenance, including labor time and repair part costs associated with factory-recommended maintenance, was factored into the 2015 survey along with average costs of an extended warranty, AAA said. A recent survey of AAA-Approved Auto Repair shops found that the majority of drivers are behind schedule in routine maintenance, including oil changes, tire maintenance and battery inspection/testing.
- Finance charges are down 21 percent to $669 per year, a decrease of $178. With rising car sales and stiff competition among dealers, many manufacturers are offering low finance rates to attract buyers, the AAA said. In 2015, average vehicle finance rates dropped 21 percent, which equates to about $15 per month on a typical five-year loan.
- Depreciation rose 4.1 percent to $3,654 per year in 2015 due to increasing new car sales that are causing an influx of used and off-lease vehicles entering the marketplace. This increased supply has resulted in lower values and selling prices for used vehicles, AAA said.
- Insurance costs jumped 9 percent to $1,115 per year, an increase of $92. Insurance rates vary widely, AAA said, so its calculations are based on low-risk drivers with excellent driving records. While premium calculations are confidential, this modest increase of $7.67 per month may be due in part to high-cost modern vehicle features such as infotainment systems, advanced safety features and lightweight materials that can be more expensive to repair and, therefore, insure, AAA said.
- License/registration/taxes increased 3.74 percent to $665 per year as vehicle prices rose modestly in 2014. Some states also increased fees related to vehicle purchasing, titling, registration and licensing.