True Cost of Owning a Car per Month

Ask most people what their car costs each month and they will name the payment. The real number is much higher once you add fuel, insurance, maintenance, repairs, registration and the quiet cost that rarely shows up on a bill: depreciation.

This guide breaks the monthly cost into its parts, shows how to estimate each one for your own car, and explains which ones you can actually control.

AAA's annual "Your Driving Costs" study (opens in a new tab) is a widely cited national estimate of these costs for new cars, and it consistently finds depreciation and insurance among the largest pieces. Your own numbers will differ, so calculate them.

Depreciation is the value your car loses each year. You do not pay it monthly, but you feel it when you sell or trade in. New cars typically lose value fastest in the first few years; older cars lose less in dollars each year.

How to estimate it:

1. 1Note what you paid (or what the car is worth now).
2. 2Estimate what it will be worth when you plan to sell, using pricing guide trends for similar older models.
3. 3Divide the difference by the months you will own it.

Our depreciation calculator does this with a rate you choose. Buying a car a few years old, and keeping any car longer, are the most reliable ways to cut this cost.

Only the interest is a cost of ownership; the principal you repay becomes equity. But the full monthly payment is what affects your cash flow, so budget for both.

• A longer loan lowers the payment but usually raises total interest.
• A larger down payment reduces both interest and the risk of owing more than the car is worth.
• Your credit, the lender, the loan term and whether the car is new or used all affect the rate.

Use our car loan calculator to see the payment and total interest for different terms. If you are leasing, the monthly payment largely replaces depreciation and financing; compare with our lease vs buy calculator.

Fuel is usually the most visible variable cost.

Gas: monthly miles ÷ MPG × price per gallon

EV: monthly miles ÷ 100 × kWh per 100 miles × price per kWh

Use the official ratings for your car from fueleconomy.gov (opens in a new tab), then adjust with your real-world numbers, since driving style, weather, speed and tires all matter. Our fuel cost calculator pulls EPA ratings for your car, and our MPG calculator works out your real MPG from fill-ups. If you are considering an EV, the EV vs gas calculator compares the two with your local prices.

Insurance is often one of the largest fixed costs. It depends on your age, driving record, location, credit (in states that allow it), coverage choices, deductible and the car itself. See what affects car insurance rates.

To cut it without cutting protection:

• Compare quotes from several insurers at each renewal.
• Raise your deductible if you have savings to cover it.
• Drop collision and comprehensive on a low-value older car if the premium is high relative to the car's value.
• Ask about discounts: bundling, safe driving, low mileage, safety features.

Maintenance is the scheduled work in your owner's manual: oil changes, tire rotations, filters, fluids, brakes, tires, spark plugs and timing belts on engines that have them. Costs rise with age and mileage, and some years are heavier (for example, when a major interval service comes due).

Build an annual plan from the schedule in your manual, then divide by 12. Our maintenance cost tool gives a starting estimate, and our guide to average car maintenance cost explains the main drivers. Typical ranges vary by vehicle and region.

Repairs are what break unexpectedly. Even reliable cars need them eventually, and the risk rises once the factory warranty ends.

Rather than guess, set aside a monthly repair reserve in a separate account. A higher reserve makes sense for:

• Cars past their powertrain warranty
• High-mileage cars
• Models or years with known problem patterns. Look up NHTSA complaints by component for your year on our research pages.

An extended warranty is one way to handle repair risk, but it costs money up front and has exclusions. See is an extended warranty worth it?.

These include annual registration, any personal property or excise tax your state or town charges on vehicles, inspection fees and, in some states, an added annual fee for EVs and hybrids. Check your state's DMV for your amounts and divide the annual total by 12.

Parking, tolls, car washes, roadside assistance memberships and accessories add up. If you pay for parking at work or at home, it can be one of your largest monthly costs.

Fill in your own numbers:

Our cost of ownership calculator does this math for you over five years, using EPA fuel data and the inputs you enter, and shows every assumption. To compare cars on a per-mile basis instead, try the cost per mile calculator or read our guide to calculating cost per mile.

• Most control: which car you buy (price, efficiency, insurance class, reliability), how long you keep it, how much you drive, how you shop for insurance and financing, and keeping up with maintenance so small problems don't become big repairs.
• Some control: fuel cost through driving habits and tire pressure; maintenance cost through choosing a good independent shop or doing simple DIY jobs.
• Little control: fuel prices, registration fees and the market's effect on resale value.

Estimates are a start. The most accurate cost of ownership comes from your own records. Add your car to your free garage and log fuel, services, repairs and fees as they happen. After a few months, you will know exactly what the car costs you, and you will have a service history that helps when you sell.