Driving Costs Hit Six-Year Low, AAA Finds

Annual cost to own and operate a vehicle falls to $8,558 in 2016

AAA Your Driving Costs

Due to falling gas prices, the annual cost to own and operate a vehicle in the United States has fallen to a six-year low of $8,558 according to AAA’s 2016 Your Driving Costs study. This year, a driver can expect to spend 57 cents for each mile driven, approximately $713 per month, to cover the fixed and variable costs associated with owning and operating a car.


“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.”


Based on 15,000 miles

Small Sedan

Medium Sedan

Large Sedan

Sedan Average



Annual Total Cost







Annual Cost Per Mile








“Low gas prices can be a boon for green-car buyers – when lots of people are buying large cars and light trucks due to falling fuel prices, dealerships are more likely to offer incentives to attract buyers to ‘greener’ fuel-efficient models,” said the Automobile Club of Southern California Automotive Research Center Manager Megan McKernan.  “Motorists can research many green car and truck options in the AAA Green Car Guide which can be located at www.AAA.com/greencar.”  


Your Driving Costs at a Glance:


Fuel: DOWN 24.62 percent to 8.45 cents per mile/$1,267.50 per year (-$414)
Compared to last year’s study, the average price of regular fuel fell more than 25 percent to $2.139 per gallon in the fourth quarter. At the same time, vehicle redesigns and improved powertrain technologies increased the average fuel economy of the sedans used in the study to 26.71 mpg.


Insurance: UP 9.60 percent to $1,222 per year (+$107)
Insurance rates vary widely with driver, driving habits, issuing company, geographical area and more. 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. Rising costs are likely attributable to lower gas prices, which have resulted in more miles driven, greater numbers of collisions and higher insurance payouts.


Depreciation: UP 2.87 percent to $3,759 per year (+$105)
The single largest ownership expense, depreciation, rose for 2016 due to robust new-car sales and, therefore, increasing numbers of used and off-lease vehicles entering the marketplace. This reduces retained value and resale prices, thus increasing depreciation.


Maintenance: UP 3.33 percent to 5.28 cents per mile/$792 per year (+$25 per year)
While there is significant variation among individual vehicles, modest increases in vehicle maintenance are attributable to engines requiring more expensive semi- or full-synthetic motor oils, and increases in extended warranty pricing and shop labor rates.


A recent AAA survey found that 35 percent of Americans have skipped or delayed service or repairs that were recommended by a mechanic or specified by the factory maintenance schedule. According to AAA’s certified Approved Auto Repair shops, consumers that forget or ignore recommended maintenance ultimately pay higher repair costs.


License/Registration/Taxes: UP 3.31 percent to $687 per year (+$22)
License, registration and tax costs are impacted by vehicle sales prices and state/local tax rates. In addition to rising vehicle prices, many states, counties and cities have increased their fees related to vehicle purchasing, titling, and registration and licensing.


Finance Charges:  UP 2.09 percent to $683 per year (+$14)
The average vehicle finance rate remained relatively unchanged in 2016. The modest dollar increase in finance charges is attributable to higher new car prices combined with increased tax, title, license and registration fees, which are typically rolled into the vehicle financing.


Tires: UP 2.04 percent to 1.00 cent per mile/$150 per year (+$3)
Due to the competitive and dynamic nature of the tire market, tire costs in 2016 are relatively unchanged, rising by just .02 cent per mile.


In addition to calculating the driving costs for sedans, AAA determined annual costs associated with both minivans and sport utility vehicles.  Owners of these vehicle types also benefit from lower driving costs in 2016, at $9,262 and $10,255 respectively.


“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,” continued Nielsen. “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.”


AAA has published Your Driving Costs since 1950. That year, driving a car 10,000 miles per year cost 9 cents per mile, and gasoline sold for 27 cents per gallon. The Your Driving Costs study employs a proprietary AAA methodology to analyze the cost to own and operate a vehicle in the United States. Variable operating costs considered in the study include fuel, maintenance and repair, and tires. Fixed ownership costs factored into the results include insurance, license and registration fees, taxes, depreciation and finance charges. Ownership costs are calculated based on the purchase of a new vehicle that is driven over five years and 75,000 miles. Your actual operating costs may vary. See AAA’s 2016 Your Driving Costs brochure for a list of vehicles and additional information on the underlying criteria used in the study.

Motorists can map a route, identify gas prices, find discounts, book a hotel and access AAA roadside assistance with the AAA Mobile app for iPhone, iPad and Android. Learn more at AAA.com/mobile. AAA clubs can be visited on the Internet at AAA.com.


Media Contacts

Elaine Beno
(714) 885-2324