The annual cost of owning a car has skyrocketed in the last year to over $12K

That’s a big jump over 2022, when the average cost of owning a car was $10,728. The increase, AAA says, comes down to higher prices for new cars, increased depreciation after they’re purchased, and falling used car values — as well as the auto industry’s shift toward big, feature-laden vehicles at the expense of more utilitarian cars.

When The Verge’s Thomas Ricker covered a similar AAA report in his First Click newsletter discussing car sharing as an alternative in 2015, Americans spent just $8,698 annually for new cars.

In 2015, Americans spent just $8,698 annually for new cars

Half-ton pickup trucks are the priciest, says AAA, costing more than $1 per mile. AAA notes that fuel costs have slightly dipped by two cents per mile versus last year, but inflation has sent the cost of electricity from 13.9 cents per kWh to 15.8 cents per kWh, making EVs a little pricier to drive than last year.

AAA’s report was based on new cars; people who own used cars will probably pay less despite the greater likelihood of repairs as cars age. For instance, given a rough approximation of my driving habits, the US Department of Energy’s vehicle cost calculator estimates that my 2011 Honda Odyssey costs me about $2,372 annually, which is probably about right, even though I rarely drive it.

Most Americans have no choice but to drive

For people who work from home or are able to use alternative transportation like cycling, car shares, or public transit, costs dive even lower — the American Public Transit Association estimated in 2020 (based on 2017 APTA data) that Americans can save up to almost $10,000 by switching to public transit and living with one car.

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