The Hidden Cost of Owning a Car and How to Save

fueling a car with baby in arms

In 2022, the average U.S. citizen spent more than $10,500 per year to own and operate a car.

Purchasing a car is only the first in a long list of hidden costs.

Fortunately, you can lower your expenses if you look in the right places. Keep reading to learn about the true cost of owning a car.

The Real Cost of Owning a Car

Your car needs regular service and maintenance, and older models need more of it. Many drivers pay up to 3% of the cost of a new car per year in maintenance fees.

Tire Replacements

Tires wear out and break down over time. Some drivers—particularly those living in cold winter states—invest in a separate pair of winter tires, and a good set of fresh tires can cost thousands of dollars.

Depreciating Value

Driving your car off the lot is the most expensive ride you’ll have in it. It’s said that a new car depreciates by 20% the moment it’s driven off the lot.

Auto Insurance

Auto insurance is one of the non-negotiable vehicle costs for car owners. It’s mandatory, it’s expensive, and the cost only goes up with more expensive vehicles. On average, drivers pay more than $1,600 per year for auto insurance.

Registration and Taxes

Vehicle ownership unfortunately comes with strings attached. You have to pay to license your car, renew your registration, and move between states. Licensing fees and associated taxes can cost up to 3.5% of your car’s value.


Cars need gas to run. Electric vehicles need fresh charges—and both are expensive and dictated by market conditions.

Financing Repayments

Unless you bought your car for cold, hard cash, you’ll be paying off the lease for months or years at premium prices. Leasing costs typically cap out around 5% to 10% of a car’s value, resulting in substantial sums.

How to Save Money as a Car Owner

Owning a car comes with the hidden costs mentioned above. But that doesn’t mean you can’t be kinder to your finances. One of the things you can do right now is figuring out how to lower your insurance costs.

Drive Less and Drive Carefully

The easiest way of lowering your car costs is by using your car less. Gas is expensive, and as recent global events have shown, gas prices can be volatile.

Switching to public transit where available lowers the amount you spend on gas. But it also lowers your upkeep costs. When you do drive, it’s recommended to drive between 35 and 60 miles per hour.

Every 5mph above that costs the equivalent of 24 cents extra per gallon.

Review Your Insurance

Insurance premiums can be expensive and insurers don’t always do enough to keep loyal customers around. Browse quotes online to get the best deal and remember that loyalty only matters if you’re saving money.

Drive Responsibly

Avoiding accidents and taking advanced driving courses are two surefire ways of keeping your insurance premiums low. Driving responsibly helps avoid accidents, and speeding tickets, and lowers the strain you put on your vehicle.

Find the Cheapest Gas Stations Online

You don’t need to drive around to find cheap gas. Instead, you can find the best deals on gas online. Do a quick search before filling up on gas to avoid paying more than you have to.

Start Saving Today

The cost of owning a car needn’t be prohibitive. Switching insurance providers, driving carefully, and shopping around for the best deals are kinder to your wallet and help keep your car running for longer.

Owning a car can be expensive, but that doesn’t mean you should pay more than you have to— and at Wise Money Life, we help our readers lower their costs across all aspects of life. Click here to compare auto insurance rates in your area.



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