The real cost of car ownership in the US

Miami Herald

14-07-2025

Owning a car is not a luxury. It's more of a necessity that helps you get to work, college, or school. Cabs and ridesharing apps are notoriously unreliable. Public transport takes a huge chunk of your workday, and you'll have to adjust your schedule to theirs. Convenience, however, comes at a price. There is, of course, the cost of the car itself. Then there are recurring expenses that also determine the cost of car ownership, including insurance, fuel, maintenance, and parking, and the list goes on.
Car ownership costs worldwide have surged over the past few years. Americans, too, are finding it increasingly challenging to own and operate a vehicle. The increasing prices of cars, along with taxes, hidden fees during the purchasing process, parking expenses, maintenance costs, and more, are becoming overwhelming. While we may passionately debate whether cars are depreciating assets, it's clear that they are often a necessity in today's world. The best approach is to understand the various costs associated with car ownership and select the option that best suits our budget, Way.com reports.
Real Cost of Car Ownership in the USA 2025: A Breakdown
As of 2025, the average annual cost of owning a car in the U.S. has reached approximately $12,297, translating to about $1,025 per month. Apart from fuel, insurance, maintenance, and repairs, the cost of car ownership can also include depreciation, financing charges, taxes, and fees that may go unnoticed. These costs add up to the average monthly cost to make it a significant amount. Approximate additional costs that may be considered are:
Depreciation: ~$4,680 (38%)Financing Charges: ~$1,030 (8%)
Here is a detailed breakdown of the true cost of car ownership in the USA based on internal research by the Way team. It highlights key aspects that can help you plan your budget and savings accordingly.
Parking Costs
Monthly parking fees are a major yet often overlooked component of vehicle ownership. According to recent data, parking costs vary dramatically across the U.S., adding a significant burden in urban areas. If you live in New York City, parking alone can cost more than many used cars each year, over $7,400 annually. Even in lower-cost major cities, you're still likely paying $2,000–$3,000 annually if you park downtown.
The graph and table below will give an idea of the cost variations across major American cities:
Parking costs across major U.S. cities
Washing your car at home can often be challenging. Most car owners in America wash their cars only once a month, which falls short of the recommended twice a month. Even if you spend conservatively and get your car washed only once a month, this is what you can expect:
Here's what to expect:
Fuel costs are one of the most dynamic and regionally variable expenses in car ownership. (Electric vehicle (EV) owners can skip this part, as they typically save significantly compared to gasoline-powered vehicles.) For a commuter driving 12,000 miles per year in a car that gets 25 miles per gallon (mpg), fuel costs would be approximately $1,560 annually, assuming a gas price of $3.25 per gallon. If the driver has a higher mileage of 15,000 miles per year, the costs can rise to $2,235. Additionally, gas prices can fluctuate based on your location, whether you live in a rural or urban area.
The five-year gas price chart shows a post-2022 peak, followed by relative stability in the $3.00–$3.50 range through 2025.
Maintenance is a non-predictable cost category, as it varies based on driving habits, vehicle type, and location.
Note that this value is for routine maintenance and minor repairs for newer vehicles. Typical driving conditions and proactive maintenance habits may vary for each car owner. The estimated range may go up to $1,200–$1,800/year for major repairs or vehicles with higher mileage or older ones. It is often difficult for older vehicles to acquire parts, and unexpected repairs may be required.
Insurance is one of the most variable car ownership expenses in the U.S., heavily influenced by location, driver profile, and coverage type. Annual auto insurance costs average between $2000 and $5000, starting with full coverage, depending on the vehicle type and usage.
Imported vehicles and auto parts were subject to a 25% tariff this April, which will significantly impact car ownership costs in the U.S. in 2025. Tariffs have also steeply increased the vehicle prices of foreign brands by $4,000 to $10,000.
Estimates indicate that the tariffs on new vehicles in the U.S. could also potentially increase the prices by $1,000 to $3000, depending on the vehicle's make and model. Even vehicles assembled in the U.S. are affected, as some auto companies utilize imported car parts that incur high tariffs year over year.
The cost of auto repairs has surged as tariffs have increased the prices of imported parts, including engines, transmissions, and other car components. The surge may also lead to a shortage of imported parts as automakers will struggle to match customer demand. Insurance companies will most likely increase the cost of insurance premiums to cover the higher payout. Reclaiming replacement parts will also depend on the price of car insurance, which will surge by 10% this year.
This story was produced by Way.com and reviewed and distributed by Stacker.
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