Buying a New Car? Prepare for Over $10K in Yearly Ownership Costs

The annual cost of owning and operating a new car ballooned nearly 11% in the past year to $10,728 — or $894 per month — according to AAA’s Your Driving Costs study.

That represents a considerable hike from 2021, when it cost an estimated $9,666, or $805 per month, to own a new car. Costs normally don’t rise that dramatically year over year: In 2021, annual new car ownership costs rose 5% over 2020’s figures, according to AAA.

The cost estimate in the 2022 study doesn’t include the monthly principal payment for those who take out a loan, so drivers will want to make sure to budget for the full cost of car ownership when buying a new car.

Why is it more expensive to own a new car?

Unsurprisingly, the AAA report cited fuel prices as the main culprit behind this year’s sky-high rise. Gas prices climbed steadily for more than a year before peaking at an average of over $5 a gallon in June, and U.S. drivers are on track to spend up to $562 billion on gasoline this year — twice as…

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This article was written by Cara Smith and originally published on www.nerdwallet.com