For those planning to buy a new car, budgeting for more than just the sticker price is getting more important as those costs rise.
Total ownership costs have surged in recent years, even as new car prices have stabilized. A new car driven 15,000 miles a year will have additional costs of $7,612 annually, on average, not including depreciation, according to AAA's annual "your driving costs" report. That's nearly doubled the figure from a decade earlier, which was $4,191.
According to data from Edmunds, a vehicle inventory and information company, the annual out-of-pocket expenses for new cars can range between $29,247 to $36,404 over five years.
To understand how much it currently costs to maintain a new car, Business Insider looked at the 2024 models for the best-selling vehicles in the US, including the Ford F-150, the Toyota Rav4, and the Tesla Model Y.
To estimate the value of a vehicle, Edmunds assumes the car is driven 15,000 miles annually and the car is financed for 60 months after a 10% down payment.
F-150 and Model Y will cost about $7,000 annually to operate and maintain
An F-150, the most popular vehicle in the US, would currently incur an additional $36,400 in costs in the first five years over the purchase price, according to Edmunds's data. Those expenses include gas, interest charges on the loan, insurance, maintenance, tax and fees, and repairs.
The total cost of a new F-150 over five years, including the $36,400 additional costs on top of the $48,100 sticker price, is about $85,000.
Tesla's Model Y is the best-selling electric vehicle in the US and would incur an additional 5-year cost of $34,500, about $2,000 cheaper than the F-150. That would make the total cost of the car about $91,000, including the original purchase.
While the fuel is considerably cheaper than the Ford, repairs and insurance are much more expensive for the electric vehicle.
We looked at the gas and hybrid models for the Rav4, the best-selling non-pickup in the US. Edmunds estimated it had costs of about $29,300 over the first five years.
While the hybrid is more expensive in terms of insurance, maintenance, and repairs, those costs are offset by the more affordable price of powering the car through electricity.
The total cost for gas and hybrid Rav4s would be about $64,300 over five years, including the original purchase price of about $35,000. Both models also have much lower depreciation than the F-150 and the Model Y, dropping about $12,300 in value over five years.
It's important to consider the total cost of ownership when selecting a new vehicle, which can be thousands more out of your pocket every year.
