The cost of owning a car goes far beyond the purchase price. There are taxes to pay, as well as insurance premiums and maintenance costs. Taken together, these extra expenses can add up to thousands of dollars a year.
The amount you spend on your vehicle can vary dramatically depending on where you live. A new study from the personal finance website Go Banking Rates found that the cost of owning a new car can differ by as much as $7,217 over three years, depending on the state you live in.
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The study assumes a driver buys a new car for $33,543, the average transaction price according to Kelley Blue Book. It then looks at six factors involved in owning a car: sales tax, title fees, registration fees, average annual insurance premiums, annual gas expenses and average maintenance and repair costs. Ignoring the cost of the car itself, the average additional cost of owning a car for three years in the U.S. is $11,227.
However, that cost can be quite a bit higher or lower depending on your location. Michigan is the most expensive place to own a car, thanks to the highest insurance premiums of any state. The total three-year cost of having a car in Michigan is $15,315.
New Hampshire is the cheapest state, with a three-year average cost of $8,098. The state doesn’t impose a sales tax on vehicle purchases and boasts low insurance premiums and low maintenance and repair costs.
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Here are the 10 most expensive states for owning a car over a three year period. The total figure used for the ranking is the additional cost of a car over three years, beyond the retail price. The one-time purchase cost is for sales tax and title fees. And the annual ownership costs cover registration fees, car insurance and gas and maintenance expenses.
10. Washington: $12,613
One-time purchase costs: $3,000
Annual ownership and usage costs: $3,204
9. Nevada: $12,696
One-time purchase costs: $2,746
Annual ownership and usage costs: $3,316
8. Montana: $12,764
One-time purchase costs: $12
Annual ownership and usage costs: $4,251
7. Rhode Island: $12,896
One-time purchase costs: $2,400
Annual ownership and usage costs: $3,499
6. Maryland: $12,926
One-time purchase costs: $2,151
Annual ownership and usage costs: $3,592
5. Florida: $13,211
One-time purchase costs: $2,090
Annual ownership and usage costs: $3,707
4. New Jersey: $13,484
One-time purchase costs: $2,408
Annual ownership and usage costs: $3,692
3. District of Columbia: $13,561
One-time purchase costs: $2,039
Annual ownership and usage costs: $3,841
2. California: $14,452
One-time purchase costs: $2,116
Annual ownership and usage costs: $4,112
1. Michigan: $15,315
One-time purchase costs: $2,028
Annual ownership and usage costs: $4,428
And here are the 10 cheapest states for car ownership:
10. New Mexico: $9,923
One-time purchase costs: $1,011
Annual ownership and usage costs: $2,971
9. Maine: $9,866
One-time purchase costs: $1,878
Annual ownership and usage costs: $2,663
8. Alaska: $9,814
One-time purchase costs: $15
Annual ownership and usage costs: $3,266
7. Oregon: $9,696
One-time purchase costs: $77
Annual ownership and usage costs: $3,206
6. Virginia: $9,603
One-time purchase costs: $1,352
Annual ownership and usage costs: $2,750
5. Ohio: $9,595
One-time purchase costs: $1,944
Annual ownership and usage costs: $2,550
4. Wisconsin: $9,571
One-time purchase costs: $1,747
Annual ownership and usage costs: $2,608
3. North Carolina: $9,448
One-time purchase costs: $1,058
Annual ownership and usage costs: $2,797
2. Missouri: $9,280
One-time purchase costs: $1,428
Annual ownership and usage costs: $2,617
1. New Hampshire: $8,098
One-time purchase costs: $25
Annual ownership and usage costs: $2,691
