New Car Ownership Costs Fall, But EVs are Still More Expensive
AAA’s latest report shows some good news for new car buyers in the US: the cost of owning a new vehicle has dropped significantly in 2025. The annual cost is now estimated at $11,577, which is a decline of $719 from last year. This is mainly due to lower depreciation, a decrease in financing charges, and a drop in the price of gas.
The Challenges for EV Owners
While the overall costs of owning a new car are down, the report highlights that electric vehicles (EVs) still have a higher total cost of ownership. This is because of several factors, including a higher purchase price, faster depreciation, and more expensive insurance. Additionally, the price of electricity for charging has gone up slightly to about 16.7 cents per kilowatt-hour.
Hybrids Offer a Good Balance
The AAA study compared gasoline, hybrid, and electric models across various categories. It found that hybrids are becoming a great alternative for those who want efficiency without the high ownership costs of a pure EV. Hybrids offer the benefits of lower fuel costs similar to EVs, but without the higher upfront price tag and faster depreciation.
What This Means for Buyers
The report emphasizes that there is no one-size-fits-all answer when buying a new car. AAA advises that shoppers should look at the total cost of ownership over a five-year period, instead of just focusing on the sticker price. This includes factors like fuel, maintenance, insurance, and depreciation, all of which vary depending on the type of vehicle and the owner’s habits.
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