Based on Bankrate’s new Hidden Value of Automobile Possession Research, the hidden prices of proudly owning a automobile common $6,684 yearly within the U.S. Years of unpredictable inflation and unstable auto insurance coverage charges have reworked automobile possession, certainly one of America’s most foundational components of monetary independence, right into a budgetary burden for a lot of drivers.
To uncover how a lot drivers in every state pay per yr in hidden auto bills, we evaluated 4 key metrics for gas-powered vehicles: automobile insurance coverage, fuel, upkeep and repairs, and car taxes. We additionally accomplished a state-by-state evaluation of essentially the most and least costly hidden prices, together with our consultants’ recommendations on safeguarding your funds and mitigating the affect of hidden automobile possession prices.
Key takeaways
- The nationwide hidden price of automobile possession is $6,684 per yr, with hidden prices in Illinois being the closest to the nationwide common at $6,632 yearly.
- Drivers in Georgia pay essentially the most in hidden car bills, averaging $8,249 per yr or $687 monthly.
- New Hampshire has the bottom hidden automobile possession prices within the U.S., averaging $4,299 per yr, or $358 monthly.
- Hawaii and California have the best fuel costs within the nation, at $4.69 and $4.66 per gallon as of late July, however Indiana drivers pay essentially the most for fuel yearly, averaging $2,913 attributable to greater annual mileage.
The typical hidden price of automobile possession is $6,684 per yr
When it’s time to purchase a brand new automobile, we’re usually fixated on the down cost particulars and crunching these month-to-month lease or mortgage figures, however there are different prices that are inclined to fly below the radar. Drivers normally know they should pay taxes and automobile insurance coverage, however they won’t know the way a lot these payments will add as much as till they’re able to signal on the dotted line.
And the hidden prices don’t cease there. Together with automobile insurance coverage, fuel, taxes, upkeep and restore prices continually fluctuate and may dramatically improve with out a lot discover or various. On common, the hidden price of automobile possession provides an additional $557 monthly to your transportation price range along with your month-to-month automobile cost.
The hidden price of automobile possession varies between states, drivers and autos. To match between states, we created a profile for a 40-year-old driver with a clear driving file and good credit score. The car chosen for the profile is a 2022 Toyota Camry with full protection automobile insurance coverage. By preserving these traits the identical for each state, we are able to see how different components like fuel worth, annual mileage, upkeep and repairs, and state taxes affect these hidden bills regionally.
Insurance coverage is the most costly hidden price of automobile possession
The nationwide common price of full protection automobile insurance coverage is $2,329 yearly or $194 monthly as of August 2024, which eats up a substantial portion of a driver’s family price range. Automobile insurance coverage premiums differ between states attributable to completely different state rules relating to protection varieties and tort, site visitors density, local weather and several other different components. Whereas not all features of danger are weighted the identical in every state or by every insurance coverage firm, there are some notable similarities among the many most and least costly charges for full protection automobile insurance coverage.
Costliest states for automobile insurance coverage
New York, Louisiana, Florida, Colorado and Nevada are the states with the best common price of full protection automobile insurance coverage as of August 2024. All these states have a minimum of one densely populated metropolis with a significant vacationer attraction. Excessive site visitors density and trip congestion improve the chance of automobile accidents. Colorado, Nevada, New York and Florida have a number of the highest charges of car thefts within the nation, and New York, Louisiana and Florida have excessive declare charges related to excessive climate.
“The charges are ridiculously excessive right here,” says Stacy Lynn, a banking relationship supervisor in Colorado, who observed excessive premiums explicitly related to complete protection. “Though I paid money for my 2020 Subaru, it nonetheless has a excessive worth, so I need full protection. Once I tried to have a $250 complete deductible, the speed shot means up, so I’m caught with a $500 deductible.”
Moreover, New York, Florida and Nevada provide or require private damage safety (PIP), a kind of no-fault medical protection for the named insured and their passengers. Lower than half of the states within the U.S. have PIP protection, however a lot of the states that do have greater insurance coverage charges.
| New York | $3,697 | 59% greater |
| Louisiana | $3,646 | 57% greater |
| Florida | $3,451 | 48% greater |
| Colorado | $3,259 | 40% greater |
| Nevada | $3,074 | 32% greater |
Least costly states for automobile insurance coverage
Idaho, Vermont, Ohio, Maine and Hawaii have the bottom common charges for full protection automobile insurance coverage as of August 2024. Hawaii is exclusive in that it doesn’t enable age or credit-based insurance coverage scores as automobile insurance coverage ranking components, which can be why drivers within the Aloha State pay low common premiums.
The 4 different states don’t require drivers to hold PIP, which reduces the quantity of protection drivers should pay for. Additionally they don’t expertise as many excessive climate occasions. In contrast to lots of the costlier automobile insurance coverage states, the most affordable states have a plethora of insurance coverage carriers out there and decrease inhabitants density.
| Idaho | $1,322 | 43% decrease |
| Vermont | $1,385 | 41% decrease |
| Ohio | $1,497 | 36% decrease |
| Maine | $1,505 | 35% decrease |
| Hawaii | $1,543 | 34% decrease |
Why are automobile insurance coverage charges on the rise?
Between June 2022 and June 2024, common full protection automobile insurance coverage charges skyrocketed by 20 p.c, in line with charge information from Quadrant Data Companies. In a wholesome automobile insurance coverage market, it is not uncommon for premiums to fluctuate barely at every coverage renewal. Nonetheless, this sustained improve in insurance coverage charges was a wake-up name for a lot of drivers about how the hidden prices of automobile possession can typically be out of their management.
Varied influences have contributed to rising auto insurance coverage charges, with sticky automobile insurance coverage inflation being a major driver:
- In 2021, automobile crash fatalities jumped over 10 p.c and have only in the near past began to say no.
- As of June 2024, motorized vehicle restore and upkeep stay 34 p.c greater than pre-pandemic costs.
- Shortages and provide chain disruptions within the auto mechanic and medical fields have elevated the price of bodily injury loss and medical funds associated to auto insurance coverage claims.
- Nationwide will increase in excessive climate loss, car thefts and insurance coverage fraud additionally contribute to greater insurance coverage charges.
Gasoline
Our evaluation discovered that when it’s time to gas up, People shell out a median of $3.51 per gallon on common fuel as of late July, totaling $1,837 yearly when accounting for common mileage. We thought of common common fuel costs from AAA and Federal Freeway Administration annual mileage information to see the place People are literally spending essentially the most on fuel based mostly on annual mileage. Nationally, licensed drivers drive a median of 13,596 miles per yr, however every state is completely different, and the most costly states for fuel won’t be those you’d count on.
The place are People paying essentially the most for fuel?
The next 5 states common the best annual price of fuel when accounting for common fuel costs and mileage:
- Indiana: $2,913
- Wyoming: $2,765
- Missouri: $2,279
- Georgia: $2,261
- Mississippi: $2,244
The very first thing you might discover is that California isn’t within the high 5 for the best annual fuel price. At $4.66 per gallon as of late July, California tends to have the best per-gallon fuel worth, however with drivers averaging solely 11,409 miles per yr, it’s quantity 13 in our rating.
Indiana drivers have the second-highest annual mileage within the nation however pay solely $3.68 per gallon of standard fuel. Folks naturally drive extra in states the place the inhabitants is scattered over bigger areas. In distinction, drivers dwelling in states with densely populated cities could have shorter commutes and higher entry to public transportation and ridesharing choices.
Upkeep and repairs
Routine automobile upkeep replaces broken components and helps forestall fundamental put on and tear from changing into a much bigger and costlier downside. The quantity of wear and tear and tear your automobile sustains is significantly impacted by the local weather and highway situations the place you reside and the way a lot you drive annually.
Based on 2023 AAA information, the nationwide common price of auto upkeep and repairs is 9.83 cents per mile. Through the use of every state’s regional worth parity index (RPP) from the Bureau of Financial Evaluation, which exhibits how a lot greater or decrease the costs of products and providers are relative to the nationwide common, mixed with the state’s common annual miles, we are able to see how a lot drivers in every state pay for upkeep and restore prices on common. The nationwide RPP is 100, with common upkeep and restore prices totaling $1,336. RPPs over 100 point out that items and providers price greater than common and vice versa.
Wyoming, Indiana and Mississippi have RPPs effectively under common, however attributable to every state’s excessive common annual miles, they high the checklist for the most costly common yearly price for upkeep and repairs at $1,950, $1,855 and $1,675, respectively. The District of Columbia has the best RPP within the nation at 112.8 however solely averages 6,695 miles pushed per yr — the least of any state. Drivers within the District of Columbia spend a median of $742 per yr on car upkeep and repairs.
New York and Rhode Island even have greater RPPs and decrease annual mileage, resulting in a number of the lowest common upkeep and restore prices at $1,010 and $1,019, respectively.
Taxes
When buying a automobile, potential consumers are normally acquainted with their state and county’s tax, title and licensing charges, which might differ significantly. For instance, Alaska doesn’t have a state gross sales tax on autos. Nonetheless, some municipalities have a Motor Car Registration Tax (MVRT), and the tax charge is as much as every county. Connecticut has gross sales tax and property tax on autos, with various mill charges by county, together with many tax exemptions.
Our examine didn’t embody titling and licensing charges since drivers are extra conscious of those prices. As an alternative, we aggregated statewide gross sales tax charges and multiplied them by the typical worth of a used 2022 Toyota Camry, so your precise tax charge will doubtless differ from our common.
The nationwide common automobile tax is $1,182 per yr. California has the best common annual tax price of $1,841. Subsequent is a four-way tie between Georgia, Indiana, Rhode Island and Tennessee, for a median annual automobile tax of $1,778. Total, 23 states and the District of Columbia have common annual taxes above $1,400, and 28 have taxes that fall under — with Alaska, Delaware, Montana, New Hampshire and Oregon having 0 p.c state gross sales tax charge.
States with the most costly hidden automobile possession prices
Beneath are the states with the most costly hidden prices of automobile possession:
Georgia
The Peach State tops our checklist for the best hidden price of automobile possession, with drivers paying a median of $8,249 per yr, or $687 monthly, in hidden prices. Georgia is within the high group for greater common car tax and averages $213 month-to-month for full protection automobile insurance coverage. Regardless of pretty low per-gallon fuel costs, drivers’ common annual mileage of 17,508, plus excessive annual automobile upkeep and restore prices ($1,649), pushed Georgia to the entrance of the category.
This sounds proper to Benjamin Cadet, a Georgia resident and inside gross sales chief with Accenture. “The per-hour labor charge was $25 or $30 hours, however now they cost over $100 per hour,” says Cadet. “The roads right here in Georgia are horrible, so I spend cash on tires, shocks and struts due to the potholes and hills.”
Indiana
Drivers in Indiana pay a median of $8,221 per yr for hidden automobile possession prices, or $685 monthly. Equally to Georgia, Indiana drivers pay about 7 p.c in gross sales tax, nonetheless, Indiana has a drastically decrease common charge for automobile insurance coverage ($1,675 per yr). With the second-highest common annual mileage per yr (20,560) and barely above common fuel costs, Indiana drivers pay essentially the most annual price in fuel ($2,913) and the second most for automobile upkeep and repairs ($1,855).
Louisiana
As of August 2024, drivers in Louisiana pay the second-highest charge for full protection automobile insurance coverage, with common month-to-month funds of $304. The Pelican State has barely decrease fuel costs than the nationwide common however greater common annual miles (16,612 per yr). Louisiana drivers have common hidden price of automobile possession bills of $8,220 per yr or $685 monthly.
States with the least costly hidden automobile possession prices
The next states have the bottom hidden automobile possession bills.
New Hampshire
New Hampshire is without doubt one of the states and not using a common gross sales tax on autos. Apart from just a few exceptions, it’s the solely state with out minimal automobile insurance coverage necessities, however even for drivers who buy full protection, charges are low at a median of $1,618 per yr. Because of New Hampshire drivers’ lower-than-average annual mileage (11,305 per yr), it has decrease annual fuel ($1,486) and upkeep and restore prices ($1,196), making it the most affordable state for the hidden price of automobile possession at simply $4,299 per yr or $358 monthly.
Washington
One of many first components that stands out for Washington is that drivers common solely 9,819 miles per yr—the third lowest within the nation. Though Washington has a comparatively excessive per-gallon fuel worth of $4.25, the low annual mileage cuts down on a automobile’s put on and tear, complete spend on fuel and the chance of an accident. Car homeowners in Washington pay $4,427 per yr, or $369 monthly, in hidden automobile possession prices.
Alaska
Drivers in Alaska pay extra for full protection automobile insurance coverage when in comparison with Washington and New Hampshire drivers at a median of $2,205 per yr. Nonetheless, just like New Hampshire, Alaska doesn’t have a statewide gross sales tax for autos. This, mixed with low common annual mileage (10,510 miles per yr), provides drivers in Alaskan common price of hidden automobile possession of $4,798 per yr or $400 monthly.
Abstract: Hidden automobile possession prices by state
Based on Greg Brannon, AAA’s Director of Automotive Engineering Analysis, People can love their vehicles and be financially accountable. “If you lay out the total price of possession of your choices subsequent to one another, you’ll be able to see the true price of shopping for the ‘cooler’ automobile past simply the sticker worth,” says Brannon. “Then, you’ll be able to determine whether or not the true price distinction is price it to you, personally.”
Emotion doesn’t must be utterly faraway from the automobile shopping for course of. Funds and practicality are essential, however there may be additionally a worth to having fun with a car that you’ll spend a number of time driving.
— Greg Brannon, Director of Automotive Engineering Analysis at AAA
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Bankrate’s Hidden Value of Automobile Possession Research analyzes the typical annual bills of proudly owning and sustaining a gas-powered automobile nationwide and in each U.S. state, together with the District of Columbia. These bills embody auto insurance coverage, car taxes, automobile upkeep and restore, and fuel. Bankrate’s evaluation didn’t embody automobile funds or different money owed.
Bankrate used inside Quadrant information to combination common annual full protection automobile insurance coverage premiums for all ZIP codes and carriers in all 50 states and the District of Columbia as of August 2024. Bankrate used full protection automobile insurance coverage premiums within the examine as a result of 80 p.c of insured drivers buy complete protection along with legal responsibility insurance coverage, and 76 p.c purchase collision protection, in line with a Triple-I evaluation of 2021 NAIC information. Quoted charges are for the next full protection limits:
- $100,000 bodily damage legal responsibility per individual
- $300,000 bodily damage legal responsibility per accident
- $50,000 property injury legal responsibility per accident
- $100,000 uninsured motorist bodily damage per individual
- $300,000 uninsured motorist bodily damage per accident
- $500 collision deductible
- $500 complete deductible
Premiums are weighted based mostly on the inhabitants density in every geographic area for a single, 40-year-old female and male driver with a clear driving file and good credit score. Our base profile drivers personal a 2022 Toyota Camry, commute 5 days per week and drive 12,000 miles yearly. These are pattern charges and may solely be used for comparative functions.
To find out the typical price of automobile upkeep and repairs in each state and the District of Columbia, Bankrate multiplied the nationwide common price of automobile upkeep and repairs by the state’s 2022 regional worth parity index (RPP). The nationwide common price of automobile upkeep and repairs is 9.83 cents per mile, in line with AAA’s 2023 Your Driving Prices Research. RPPs from the Bureau of Financial Evaluation are indexes that present how a lot greater or decrease efficient costs are within the state and the District of Columbia relative to the nation general. The next RPP in a state means greater costs of products and providers, and a decrease RPP means decrease costs.
Based on AAA, common automobile upkeep and restore prices embody retail components and labor for routine upkeep specified by the car producer, a complete prolonged guarantee, repairs to wear-and-tear gadgets that require service throughout 5 years of operation and one set of substitute tires.
As soon as we decided the price of automobile upkeep and repairs per mile for each state and the District of Columbia utilizing RPPs, we multiplied these figures by the typical miles pushed per yr to find out the annual common price of automobile upkeep and repairs. Bankrate used 2022 information from the Federal Freeway Administration to seek out out which state’s residents do essentially the most driving. We decided that by taking a look at car miles traveled per licensed driver, the sum of annual miles traveled by autos divided by the state’s complete variety of licensed drivers.
Common annual fuel prices for each state and the District of Columbia had been estimated utilizing AAA information on common common fuel costs as of July 24, 2024. AAA’s common fuel costs are up to date every day. We multiplied common nationwide and statewide common fuel costs by the typical miles pushed per yr to find out the typical annual price of fuel. In our fuel calculations, we used a 2022 Toyota Camry, one of the crucial widespread sedans within the U.S., to determine the typical miles pushed per gallon.
Bankrate scanned dozens of DMV and authorities web sites to combination statewide auto tax charges. Auto tax charges can differ considerably by state and a few states have completely different tax charges based mostly on the kind of car you buy or the county the place you bought your automobile. Some states cost gross sales and/or use taxes for vehicles on an annual foundation, whereas some states apply a one-time gross sales and/or use tax when the car is bought or registered and a few states don’t acquire taxes on vehicles in any respect. It’s possible you’ll be topic to a unique tax charge than what Bankrate used to calculate common car taxes for each state and the District of Columbia. We multiplied statewide auto tax charges by the typical worth of a 2022 Toyota Camry to estimate common car taxes for each state and the District of Columbia. The worth of a used 2022 Toyota Camry relies on the Kelley Blue Guide Truthful Buy Worth as of July 24, 2024. The Kelley Blue Guide Truthful Buy Worth for any particular person used car can differ considerably in line with mileage, situation, location and different components. The Kelley Blue Guide Truthful Buy Worth displays what consumers presently pay for a 2022 Toyota Camry in typical situation when buying from a dealership and is up to date weekly.
This examine offers nationwide and statewide estimates for the typical price of proudly owning and sustaining a gas-powered automobile and may solely be used for comparative functions. Precise driving prices will differ based mostly on the automobile’s mannequin and yr, location, driving habits, working situations and different components.