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Forbes Lifestyle Cars & Bikes Here’s What It Costs To Own A New Car In 2023 Jim Gorzelany Senior Contributor Opinions expressed by Forbes Contributors are their own. I write about how to maximize your automotive investment and more. Following Oct 10, 2023, 12:19pm EDT | Press play to listen to this article! Got it! Share to Facebook Share to Twitter Share to Linkedin White BMW M2 speeds down highway Getty The good news is that with supply and demand forces in the new-vehicle business finally leveling out, and dealerships’ inventories again becoming flush, what were sky-high transaction prices are finally edging back below MSRPs for many if not most models. The bad news is that regardless of its up-front cost, one still needs deep pockets to own a car these days. We’ve long said that the best values in cars, trucks and SUVs are those that are the most affordable to own over time, specifically with regard to depreciation, financing rates, insurance premiums, fuel economy and maintenance and repair costs. A given model that may seem like a true bargain on a dealer’s showroom can be a budget buster in the long run if it returns a paltry resale value, swills gas and commands high insurance rates and costly trips to the service department. At that, the AAA’s annual Your Driving Costs report estimates that the average new vehicle for 2023 will cost an owner $12,182 each year to rack up 15,000 miles, which comes out to $1,015 per month. That represents a considerable jump from last year’s annual average of $10,728. For starters, new vehicles just plain cost more than ever, especially the loaded-up SUVs and pickup trucks automakers love to build and consumers can’t seem to get enough of. According to Kelley Blue Book, the average transaction price of a new vehicle in August remained steady on a year-over-year basis at $48,451. In terms of individual ownership costs, the analytics company Quadrant Information Services says the average yearly car insurance premium for a full coverage policy is now up to $2,014. Generally, less expensive vehicles that cost less to repair in a crash and are less likely to be involved in accidents are cheaper to cover than costly luxury cars and red-hot sports cars. It’s almost always worth an owner’s time to compare rates annually among competing carriers and make sure the policy includes every applicable discount. MORE FOR YOU U.S. Dollar ‘Collapse’—Shock $8 Trillion Predicted Fed Inflation Flip To Spark A ‘Critical’ Bitcoin, Ethereum, XRP And Crypto Price Boom To Rival Gold Germany Is Making Obsolete Shells For Ukraine Because Some Of Ukraine s Tanks Really Need Them Powerball Jackpot Climbs To 1 73 Billion Here s What The Winner Will Take Home After Taxes Though fuel costs have slipped somewhat recently, the AAA says they currently average $3.70 for regular-grade and $4.51 for premium. That comes out to $2,220 and $2,706, respectively, to drive a vehicle that gets a city/highway combined 25 mpg 15,000 annual miles. It’s a snap to compare mpg ratings for all current and previous model-year vehicles via the EPA’s fueleconomy.gov website. Auto loan rates are averaging around 7% this year, according to Bankrate.com, which is up from 3.8% at the beginning of 2022. Shop around among banks and credit unions and keep an eye out for automakers’ promotional financing deals, though take heed that the lowest rates are generally limited to those with top credit ratings. What’s more, with used-vehicle prices becoming more affordable, resale values are expected to drop concurrently, with owners losing more cash to depreciation. The AAA predicts the average new vehicle can be expected to depreciate by $4,358 per year over a five-year ownership period, which is a 24% increase over the past year. Which types of vehicles will break a motorist’s budget the quickest? Think big. Full-size pickup trucks are not only among the costliest non-luxury-brand vehicles in dealers’ showrooms, commanding $60,000 or more of late, but the AAA says they’re also the most expensive to run at a yearly average of $15,858, or about $1.00 per mile. As one might expect, small cars are the cheapest to drive for five years/60,000 miles at an annual average $8,939. Not surprisingly, the AAA determined that big pickup trucks are the costliest vehicles to own, at an ...
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