It doesn’t matter what type of vehicle you’re driving, including battery electric and hybrid cars and trucks. Every mile you drive costs more than it did last year and, surprisingly, the cost of ownership of an EV is not the lowest, according to a study by the AAA released Thursday.
The total cost to own and operate a new vehicle this year is $12,297, or $1,024.71 monthly, an increase of $115 from 2023 according to the AAA’s annual Your Driving Cost study.
Indeed, consumers are caught in a crossfire of culprits starting with the effects of inflation, says Greg Brannon, AAA’s director of automotive research.
“We’ve got some big impacts on depreciation and finance charges,” Brannon explained in an interview. “Of course, accordingly this year, the more cars cost, the more they are going to depreciate. Then, of course, if you add the finance charges on top of that, you’ve got some escalating prices that really make it harder and harder for consumers.”
While Americans, in particular, love their pickup trucks, those brutes are taking the biggest bites from owners’ budgets.
“The half-ton crew cab, pickup, the most popular kind of configuration, looks like it’s over $16,000 a year, which people don’t, you know, understand,” noted Brannon. “Just the cost per mile for fuel and maintenance, is over, over 30 cents.”
The most economical ride is a small, gas-powered sedan with a total yearly ownership cost at $5,786.
For the first time, the study compared EVs, internal combustion engine vehicles and hybrids including plug-in hybrids, and revealed a gut-punch to those who thought buying a vehicles that never requires a stop at a gas station is financial nirvana.
The total yearly ownership cost for an EV is $10,811, according to the study. That compares with $7,913 for a midsize pickup truck and $7,025 for a hybrid.
Blame it on depreciation, says Brannon.
“Depreciation is quite high, and that is for two reasons,” Brannon explained. “One, you see the price of electric vehicles continue to sort of escalate. Even with the introduction of new models, we see higher average purchase prices for EVs, and then that translates, of course, to higher finance charges as well as the depreciation.”
Brannon points out that despite generally lower maintenance costs for EVs, which do not require things like oil changes or transmission service, the heavy weight of their batteries wears out tires more quickly, plus the cost of eventually replacing the battery is quite high.
“Maintenance is not free on an electric vehicle, despite what urban legend will tell you,” Brannon pointed out.
All things considered, a shopper looking for a vehicle that’s economical to own and operate might land on what some call the “Goldilocks” choice—being just right.
“If you go head- to- head hybrid across these categories, as we’ve done this year for the first time, across all the different vehicle types that we looked at, hybrid ends up the winner,” declared Brannon.
The AAA has a handy online tool for shoppers and vehicle owners to determine the cost of ownership and operation for a particular vehicle up to five model years back. It’s called the Your Driving Costs Calculator and requires submitting a few bits of basic information such as make, model, model year, estimated annual mileage and your state.
Aside from that hard data, Brannon advises shoppers to really give some thought as to how their going to use the vehicle, 98% of the time.
“I think one of the most expensive decisions that people can make is to buy a vehicle for that 2%—that time you might take a camper and go on a vacation, or that load of mulch you may or may not ever get,” Brannon counseled. “Instead, you’re driving that pickup truck and having some of the highest ownership costs, when it’s very possible that a small or medium sized hybrid vehicle could do 98% of what you need and maybe rent that truck the other 2% and save yourself the ownership expense on a daily basis.”
