How much does it cost to own a car?

Industry studies put the all-in cost of owning a new car at roughly $11,000–$12,000 a year, or about $1,000 a month, once you count depreciation, insurance, fuel or electricity, maintenance, fees, and financing. But that average hides an enormous spread: the same money spent on different models can mean a difference of several thousand dollars a year, mostly because some cars hold their value far better than others.

What is the biggest cost of owning a car?

Depreciation — the value a car loses as it ages — is the single largest cost for most owners, typically larger than fuel, insurance, or maintenance. A new vehicle commonly loses 15–20% of its value in the first year and around 40–60% over five years. Because you only feel it when you sell or trade in, it is also the cost buyers most often overlook. Choosing a model that holds its value well is the most powerful lever for lowering total cost of ownership.

How much does it cost to own a car per month?

On the industry-average new car, total cost of ownership works out to roughly $900–$1,000 a month — and that is on top of, not instead of, the loan payment in many estimates, because depreciation and financing interest are counted separately from principal. The monthly figure varies widely by model, your state, your annual mileage, and your loan terms. MotiveGrid computes a live monthly cost-of-ownership figure for every vehicle and trim.

How is total cost of ownership calculated?

Total cost of ownership adds up every dollar a car costs over a set period — usually five years — across six categories: depreciation, insurance, fuel or electricity, maintenance and repairs, registration and taxes, and financing interest. MotiveGrid models all six per trim, using real resale data for depreciation rather than estimates, then expresses the result as a five-year total and a monthly figure so two cars can be compared on the same basis.

Do electric cars cost less to own than gas cars?

Often, but not always. EVs usually win on fuel (electricity is cheaper per mile than gasoline) and on maintenance (no oil changes, fewer moving parts), but they can cost more up front and some models depreciate faster. Whether an EV is cheaper over five years depends on the specific model, your electricity rate, how much you drive, and how long you keep it. Our electric vs gas guide walks through the full comparison.

Why do two cars with the same price cost different amounts to own?

Because the purchase price is only the starting point. Two cars that sticker for the same amount can diverge by thousands of dollars over five years if one holds its resale value better, costs less to insure, uses less fuel, or needs cheaper maintenance. Depreciation usually creates the widest gap. This is why comparing the five-year cost of ownership — not just the price — is the smarter way to shop.

How can I lower my cost of car ownership?

The biggest levers are choosing a model that holds its value (depreciation is the largest cost), keeping the car longer to spread that depreciation over more years, comparing insurance quotes before you buy, and putting more money down or taking a shorter loan to cut interest. Driving fewer miles and keeping up with maintenance help at the margins. Picking the right car in the first place matters far more than any single money-saving habit afterward.

Cost of Ownership

What It Really Costs to Own a Car (2026)

The sticker price is just the entry fee. Here is what owning a car actually costs over five years, the six things that drive the number, why depreciation is the biggest of them — and how to find the real figure for any model.

Analysis by the MotiveGrid Engineering Team · scored from primary sources

What does it cost to own a car?

Industry studies put the all-in cost of owning a new car at roughly $11,000–$12,000 a year — about $1,000 a month — once you count depreciation, insurance, fuel or electricity, maintenance, fees, and financing. The price you pay at the dealer is only the beginning.

That headline average is useful for setting expectations, but it hides a huge spread. Spend the same money on two different models and your real cost over five years can differ by thousands of dollars a year — mostly because some cars hold their value far better than others. The point of this guide is to show you what makes up that number, which parts you control, and how to find the actual figure for the specific car you're considering instead of relying on an average.

The six things that make up cost of ownership

Total cost of ownership is the sum of six categories over the time you own the car: depreciation, insurance, fuel or electricity, maintenance and repairs, registration and taxes, and financing interest. Depreciation is usually the largest by a wide margin.

The six costs of owning a car — and roughly how the typical dollar splits
Cost	What it covers	Typical share of the total
Depreciation	The resale value the car loses as it ages	Largest — often 35–40%
Insurance	Premiums, priced per car and per driver	Major
Fuel or electricity	Gasoline, or charging an EV	Major
Maintenance & repairs	Service, wear items, and fixes	Moderate
Registration & taxes	Title, plates, and state fees	Smaller
Financing	Interest on a car loan	Varies with rate and term

Together, depreciation, insurance, and fuel typically account for around two-thirds of the total. We break down each category — including the surprising ones like tires and documentation fees — in the companion hidden costs of car ownership guide. The rest of this page focuses on the biggest number and on why two similar cars can cost so differently.

Depreciation: the cost that quietly wrecks budgets

Depreciation — the value a car sheds as it ages — is the single biggest cost of ownership for most drivers, usually larger than fuel, insurance, or maintenance. A new car commonly loses 15–20% of its value in year one and roughly 40–60% over five years.

It's also the cost buyers most often ignore, because you never write a check for it — you only feel it on the day you sell or trade in, when the car is worth far less than you paid. Two cars with identical sticker prices can be thousands of dollars apart after five years purely on how well they hold value. That makes resale value the most powerful lever you have for lowering total cost — and the reason MotiveGrid uses real resale data (from CarEdge) for depreciation rather than estimating it. Getting depreciation wrong can understate a car's true cost by 30% or more, which is why we never guess at it.

Why two cars at the same price can cost thousands apart

Because purchase price is the entry fee, not the bill. Two models that sticker for the same amount can diverge by thousands over five years if one holds resale value better, costs less to insure, sips less fuel, or needs cheaper upkeep.

This is the gap that averages can never show you, and it's why a $35,000 car can quietly be the more expensive choice than a $38,000 one. The only way to see it is to compare the full five-year cost of ownership of the actual models — which is exactly what MotiveGrid computes for every trim, then expresses as a single five-year total and a monthly figure so you can line two cars up directly. You can do that on any side-by-side comparison, or start from the cheapest cars to own ranking to see which models come out ahead before you even pick a contender.

How your own cost will differ from the average

Your real number depends on four things the average can't know: how much you drive, where you live, how you finance, and how long you keep the car. Each can move the total by thousands.

Pushes your cost down

Choosing a model that holds its value well
Keeping the car longer, spreading depreciation over more years
A larger down payment or shorter loan (less interest)
Lower annual mileage and a lower-cost insurance state

Pushes your cost up

A model that depreciates quickly or is expensive to insure
Trading in every two or three years (you eat the steepest depreciation)
A long loan at a high rate
High annual mileage and a high-tax, high-insurance state

MotiveGrid's cost-of-ownership model accounts for state-level differences in fuel, insurance, taxes, and fees, and lets you adjust mileage and financing — so the figure you see can reflect your situation, not a national average. The full method is documented in the cost of ownership methodology.

Cheaper to own: EV, hybrid, or gas?

There's no universal winner. EVs usually cost less for fuel and maintenance but more up front; hybrids split the difference; gas cars are cheapest to buy but cost more to run. Which is cheapest over five years depends entirely on the model and how you drive.

The honest answer comes from running the numbers on the specific cars you're weighing, not from the powertrain label. Our electric vs gas guide and hybrid buying guide walk through how the math actually shakes out — and the cheapest cars to insure ranking isolates one of the biggest swing factors. When you're ready to commit to a shortlist, the decision tool weighs cost against everything else that matters to you.

Frequently asked questions

How much does it cost to own a car?: Industry studies put the all-in cost of owning a new car at roughly $11,000–$12,000 a year, or about $1,000 a month, once you count depreciation, insurance, fuel or electricity, maintenance, fees, and financing. But that average hides an enormous spread: the same money spent on different models can mean a difference of several thousand dollars a year, mostly because some cars hold their value far better than others.
What is the biggest cost of owning a car?: Depreciation — the value a car loses as it ages — is the single largest cost for most owners, typically larger than fuel, insurance, or maintenance. A new vehicle commonly loses 15–20% of its value in the first year and around 40–60% over five years. Because you only feel it when you sell or trade in, it is also the cost buyers most often overlook. Choosing a model that holds its value well is the most powerful lever for lowering total cost of ownership.
How much does it cost to own a car per month?: On the industry-average new car, total cost of ownership works out to roughly $900–$1,000 a month — and that is on top of, not instead of, the loan payment in many estimates, because depreciation and financing interest are counted separately from principal. The monthly figure varies widely by model, your state, your annual mileage, and your loan terms. MotiveGrid computes a live monthly cost-of-ownership figure for every vehicle and trim.
How is total cost of ownership calculated?: Total cost of ownership adds up every dollar a car costs over a set period — usually five years — across six categories: depreciation, insurance, fuel or electricity, maintenance and repairs, registration and taxes, and financing interest. MotiveGrid models all six per trim, using real resale data for depreciation rather than estimates, then expresses the result as a five-year total and a monthly figure so two cars can be compared on the same basis.
Do electric cars cost less to own than gas cars?: Often, but not always. EVs usually win on fuel (electricity is cheaper per mile than gasoline) and on maintenance (no oil changes, fewer moving parts), but they can cost more up front and some models depreciate faster. Whether an EV is cheaper over five years depends on the specific model, your electricity rate, how much you drive, and how long you keep it. Our electric vs gas guide walks through the full comparison.
Why do two cars with the same price cost different amounts to own?: Because the purchase price is only the starting point. Two cars that sticker for the same amount can diverge by thousands of dollars over five years if one holds its resale value better, costs less to insure, uses less fuel, or needs cheaper maintenance. Depreciation usually creates the widest gap. This is why comparing the five-year cost of ownership — not just the price — is the smarter way to shop.
How can I lower my cost of car ownership?: The biggest levers are choosing a model that holds its value (depreciation is the largest cost), keeping the car longer to spread that depreciation over more years, comparing insurance quotes before you buy, and putting more money down or taking a shorter loan to cut interest. Driving fewer miles and keeping up with maintenance help at the margins. Picking the right car in the first place matters far more than any single money-saving habit afterward.