Vehicle Ownership Costs Rising

The average annual cost to own and operate a new vehicle reached $12,863 this year, or $1,072.92 per month, according to AAA analysis.

That’s up from 2025’s $11,577 annual average, but the organization noted that this year’s results aren’t a direct comparison with last year’s because it updated its methodology in 2026.

This year’s Your Driving Costs analysis integrated select electric vehicles and hybrids into standard vehicle categories that were once exclusively for gas-powered models.

The analysis features three key themes affecting the average annual cost: fuel prices, car prices and depreciation.

At the time of the study, AAA said the average cost of regular-grade gasoline was just over $4 per gallon and that gas prices were up 32% year-over-year. The electricity cost for at-home EV charging averaged 18 cents per kilowatt-hour, up 8%.

According to the analysis, the sales-weighted average manufacturer’s suggested retail price of new vehicles was $39,376, a slight increase, but AAA pointed out that incentives, demand and rebates ultimately round out what consumers pay.

The single largest ownership cost is depreciation, with vehicles losing a weighted average of $4,422 per year, AAA reported. For EV shoppers, vehicle type and purchase price had a significant effect on depreciation.

“For example, EV medium sedans had about twice the depreciation of gas-powered models,” AAA said.

Gas-powered medium sedans averaged $10,582 per year to own, $3,000 less than comparable EV models, according to the research.

While EVs had the lowest fuel costs, between 66% and 70% lower than gas-powered vehicles, AAA noted that those savings were “often outweighed by higher depreciation, fees and finance costs.”

By comparison, hybrids proved to be a lower-cost alternative to gas-powered medium sedans, compact SUVs, medium SUVs and pickup trucks. And many consumers are seeking them out at dealers nowadays due to high gas prices.