Estimate the true yearly cost of owning your vehicle — including fuel, insurance, maintenance, depreciation, and all the expenses that add up. See exactly where your money goes.
Updated: February 2026 • Free Tool
Enter 0 if your vehicle is paid off
Oil changes, tires, brakes, filters, etc.
Unexpected fixes and breakdowns
Enter 0 if you park for free
Used to estimate annual depreciation
Affects depreciation rate
The total annual cost of owning a car includes both visible expenses you pay out of pocket and hidden costs like depreciation that erode your vehicle's value over time. Most car owners significantly underestimate their true costs because they only think about gas and insurance, missing the bigger picture of depreciation, maintenance, and opportunity costs.
Our calculator breaks down eight major cost categories to give you a complete picture. By understanding each component, you can identify where your money goes and find opportunities to reduce your annual car expenses. The typical American spends $12,000-$13,000 per year on vehicle ownership — but your actual cost depends on what you drive, how much you drive, and where you live.
Total Annual Cost:
Total = Fuel + Insurance + Registration + Financing + Maintenance + Repairs + Parking + Depreciation
Fuel = Annual Miles / MPG × Price per Gallon
Insurance = Monthly Premium × 12
Financing = Monthly Loan Payment × 12
Depreciation = Vehicle Value × Depreciation Rate (4%-20% based on age)
Cost Per Mile = Total Annual Cost / Annual Miles
Example:
12,000 mi/year, 28 MPG, $3.50/gal, $150/mo insurance, $200 registration,
$800 maintenance, $400 repairs, $25,000 vehicle (4-7 years old):
Fuel = 12,000/28 × $3.50 = $1,500 • Insurance = $150 × 12 = $1,800
Depreciation = $25,000 × 10% = $2,500 • Total = ~$7,200/year
According to AAA and the Bureau of Labor Statistics, the average American spends between $12,000 and $13,000 per year on vehicle ownership. This figure varies significantly by vehicle type, region, and driving habits. Here is how the national averages break down by category.
The largest hidden cost. New cars lose 20% in year one, then 15% per year for the next few years. A $35,000 new car is worth just $14,000 after five years.
Based on 12,000 miles/year at current gas prices. Fuel-efficient cars (35+ MPG) can cut this to $1,200-$1,500. Trucks and SUVs may exceed $3,500.
Full coverage average. Rates vary wildly by state, age, and driving record. Young drivers pay 2-3x more. Shopping annually can save hundreds.
Includes oil changes, tires, brakes, filters, and unexpected repairs. Costs rise significantly after 100,000 miles or 8+ years of vehicle age.
Vehicle age dramatically changes the composition of your annual costs. New vehicles have high depreciation but low maintenance, while older vehicles have minimal depreciation but increasing repair bills. Understanding this trade-off helps you find the most economical ownership period and decide when to sell or replace your vehicle.
Depreciation peaks at 20% of vehicle value — a $35,000 car loses $7,000 in year one alone. Add loan payments and full-coverage insurance requirements, and the first year is the most expensive. Maintenance costs are near zero thanks to factory warranty.
Depreciation slows to about 15% per year but remains the dominant cost. Most vehicles are still under warranty, keeping repair costs low. Insurance rates remain high due to the vehicle's higher value. Loan payments continue consuming cash flow.
Depreciation drops to about 10% per year. Many owners pay off their loans in this window, eliminating the biggest monthly expense. The vehicle is still relatively reliable with moderate maintenance needs. This is typically the most economical period of ownership.
Depreciation slows to just 7% per year. With no loan payment, fixed costs are low. However, maintenance and repair costs start climbing as major components (transmission, suspension, AC) may need attention. Budgeting a repair fund becomes important.
Depreciation is negligible at 4% per year. The vehicle is essentially a depreciating asset near its floor value. Annual costs are driven almost entirely by maintenance, repairs, and fuel. A single major repair can exceed the car's value — this is when the repair-vs-replace decision becomes critical.
The most cost-effective strategy is buying a vehicle that is 3-4 years old (after the steepest depreciation) and keeping it until 8-10 years. You avoid the worst depreciation hit, enjoy several years of low-maintenance ownership, and sell before major repairs become likely. This can save $3,000-$5,000 per year compared to buying new.
Even small changes in how you buy, drive, and maintain your vehicle can save hundreds or thousands of dollars per year. Here are proven strategies to reduce each major cost category.
Beyond the obvious expenses, car ownership comes with several hidden costs that many people overlook when budgeting. These can add $1,000-$3,000 or more to your true annual cost of driving. Being aware of these costs helps you make better financial decisions about vehicle ownership.
The biggest hidden cost of all. You never write a check for depreciation, but your car loses thousands in value every year. A $35,000 new car may only be worth $14,000 after five years — that is $4,200 per year in lost value that most people ignore.
Money tied up in a car could be invested elsewhere. A $30,000 car payment could instead earn 7-10% annually in index funds — that is $2,100-$3,000 per year in missed investment returns. This is especially significant for expensive new vehicles.
Regular toll commuters can spend $1,000-$3,000+ per year on tolls alone. Monthly car wash subscriptions run $20-$40/month ($240-$480/year). These recurring costs are easy to overlook but add up significantly over the year.
Urban drivers may pay $200-$400/month for parking — that is $2,400-$4,800 per year. Even suburban drivers face parking meter costs, event parking, and the occasional parking ticket. These costs are rarely budgeted but frequently incurred.
Time spent driving, fueling, maintaining, washing, and dealing with repairs has an economic value. If you spend 1-2 hours per week on car-related tasks beyond commuting, that is 50-100 hours per year of your time. At your hourly rate, this can represent a significant hidden cost.
A $30,000 car loan at 7% APR for 60 months costs $5,618 in interest — over $1,100 per year in pure interest that does not build equity. Many buyers focus on the monthly payment rather than the total interest paid. Shorter loan terms and larger down payments reduce this cost.
Estimating your annual costs is a great start — but tracking your actual expenses reveals the true picture. Carvetka automatically organizes all your vehicle expenses, calculates your real cost per mile, and shows you trends over time. No more spreadsheets or guessing.
Log every expense — fuel, insurance, maintenance, repairs, parking, registration, and more. See your actual cost breakdown by category and compare it to national averages.
Track your real cost per mile over time with automatic odometer logging. See how your efficiency changes with seasons, driving patterns, and vehicle age.
Snap a photo of any service receipt and our AI extracts the details automatically. No manual data entry — costs, dates, and services are logged in seconds.
Set maintenance schedules and get reminders before services are due. Preventive maintenance costs less than emergency repairs — Carvetka helps you stay ahead.
