The cost to own a car is down to a six-year low, thanks to cheaper gas prices.
According to a new study from AAA, the average bill for U.S. drivers is $8,558 per year, or 57 cents for every mile. The final tally includes fixed and variable expenses, including gas, insurance, maintenance and depreciation.
“Thanks to lower gas prices, American drivers can expect to save hundreds of dollars in fuel costs in 2016,” said John Nielsen, AAA’s managing director of automotive engineering and repair. “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.”
Fuel costs of 8.45 cents per mile are down 24.6% versus last year’s study. AAA said the average price for a gallon of regular gas slipped to $2.139 in the fourth quarter. The current national average is $2.047, up 23 cents compared to a month ago. But gas prices are still down 34 cents versus the same day in 2015 because the seasonal hike in spring pump prices has been smaller than usual.
Depreciation costs ticked 2.9% higher, amounting to $3,759 per year. Vehicle maintenance is up 3.3% to $792 on average. Car insurance rates have been on the rise, and AAA measured a 9.6% increase to $1,222 annually.
“While AAA’s insurance cost estimates are based on low-risk drivers with good driving records, even this group has seen rates rise over the past few years,” AAA said.
Costs tied to licenses, registration and taxes grew 3.3%. Interest payments on car loans contribute $683 per year to the average American’s car bill, a 2.1% increase. Tire costs were relatively unchanged at a penny per mile.
Putting an exclamation point on the impact of cheaper gas and improved fuel efficiency, AAA found that it costs drivers less to own and operate a minivan ($9,262/yr) or a four-wheel-drive SUV ($10,255/yr) than a large sedan ($10,492/yr).
“One-in-five Americans plan to purchase or lease a new vehicle in the next year, and many consumers may mistakenly believe minivans are more expensive to drive than a large sedan,” Nielsen said. “With lower gas prices, these vehicles offer drivers the flexibility of transporting additional passengers and cargo while remaining more affordable to own and operate compared to a large sedan.”
Consumers have shown a preference for larger vehicles in recent years, and the global oil slump has only hastened that shift. Light trucks, a category that includes SUVs and pickups, have outsold passenger cars by 595,561 units through the first three months of 2016, based on sales figures compiled by Autodata. Also, light trucks have accounted for more than half of the industry’s total first-quarter U.S. sales of 4.08 million vehicles, which is up 3.4% versus 2015.
AAA said the cheapest car to own is a small sedan at $6,579 per year. Owners of midsize sedans pay an estimated $8,604 per year.