If you’re like many Americans (and particularly urban-dwelling millennials), you may be tempted by the prospect of living without a car. After all, your car probably sits idle around 90% of the time, and — thanks to rideshare — there are more transportation options than ever before. Indeed, Lyft has found that its passengers have “sold, donated, or otherwise discarded more than 2.1 million cars because of the availability of Lyft and other ridesharing services.”
That number could be even higher if more people took a full accounting of how much their cars are really costing them. After all, it’s easy to see the cost of every Lyft you take, but many of the costs of car ownership are more indirect. So let’s take a closer look at how much that car in your driveway is really costing you every year. (Note that this cost-benefit analysis may not apply to rideshare drivers, who are able to generate income from their investment.)
Gas or electricity prices
Let’s start with the most obvious: Gas prices are endlessly discussed economic indicators, and they require regular out-of-pocket payments, so you’re probably pretty aware of how much you pay for fuel every month. Nevertheless, it’s worth taking a look at the numbers.
J.D. Power recently estimated that the average American driver’s gasoline bill shakes out to $150 to $200 per month. In the third week of April, the average price of regular gas was $3.67 per gallon, according to AAA.
The average American driver’s gasoline bill shakes out to $150 to $200 per month.
Most gas tanks in the U.S. are between 12 and 16 gallons, meaning it would cost $44.04 to $58.72 to fill up an empty tank at that average price. But as we saw last year, when regular gasoline surged to $5.01 per gallon in June, things can change fast.
Electricity prices are more stable nationwide, at about 15.5 cents per kilowatt-hour (kWh), the standard unit for billing electricity. An average EV battery’s capacity is 67.7 kWh, meaning it would cost around $10.50 to fully charge a battery at home. If you need to charge on the road, you may receive complimentary charging through your car company or at some retail or office locations. When paying at a fast-charging station, expect to pay a little more than at home, often around $12 to $16 for a full charge.
Idaho National Labs has a handy chart to compare energy costs for electric and gasoline vehicles. It shows that it’s reasonable right now to expect to pay about 5 cents per mile for an EV, versus 16 cents per mile for a gas-powered car.
Keep in mind that gasoline and electricity prices vary significantly by state, and your car and driving behaviors will ultimately determine how much you pay to power your car each month.
According to the latest report from the National Association of Insurance Commissioners, the average U.S. driver spent $1,176 for liability, comprehensive, and collision insurance in 2020. Maine had the lowest average premium, at $788 per year, while Louisiana had the highest, at $1,684. AAA found that a typical urban or suburban driver under 65 years old, with no accidents on record, paid $1,588 for insurance last year.
Maintenance and repairs
Americans collectively spend a whopping $194 billion on car maintenance a year. On an individual level, maintenance and repairs can add up fast.
Moderately priced tires run about $100 to $300 plus the labor to change them, which varies widely per state. The National Highway Traffic Safety Administration recommends changing your tires at least every six years, so if you buy four $150 tires every six years, you’re averaging $100 per year for tires — but you’ll also want some cash on hand in case you get a flat.
You should expect to get two oil changes per year, or three if you put a lot of miles on your car. Basic service averages around $31.66, according to Bankrate, or $75.32 for top-tier products.
Then there are the unpredictable big-ticket items, especially ones that aren’t covered by insurance or warranties.
A basic broken windshield can run around $200 to $500, but newer cars with cameras, sensors, displays, and other integrated technology can cost over $1,000 to replace their windshields, according to Kelly Blue Book. On some cars, even a lost key can cost several hundred dollars to replace. If you need to get your car towed to a repair shop, expect to pay up to $125 to be towed a short distance, or several hundred dollars if you’re caught farther afield, according to J.D. Power.
Unexpected maintenance and repair costs are one of the most challenging aspects of car ownership. A Federal Reserve survey found that 32% of Americans would be unable to pay for a sudden $400 expense.
32% of Americans would have to borrow money, sell something, or would be unable to pay for a sudden $400 expense.
That means a broken windshield, ignition issues, or two flat tires can represent a real financial emergency for many drivers, especially for the 85% of Americans who commute by car to work.
There’s a “pink tax” on car maintenance, too: Jerry found that women pay on average $23 more per year for car repairs compared with men.
Your experience with parking — and what it ultimately costs you — depends almost entirely on where you live and drive. Overall, parking is an $8.2 billion industry in the U.S., but if you live somewhere with an abundance of parking spaces, you may only reach for your wallet when you’re going to a large event or airport.
If you’re in a city, on the other hand, you may have to pay to park just about everywhere, either at meters or with parking permits. According to INRIX, the nationwide average for a two-hour parking spot is $4 — but that ranges from $33 in New York City to $22 in Chicago to $6 in Atlanta. In Washington, D.C., residential passes run $50 per year; Los Angeles permits are up to $34 per year; and New York City may soon charge up to $30 per month.
Almost anywhere you go, parking tickets are always a possibility. The Urban Institute looked at parking tickets in three cities and found that average fines ranged from $35 in Austin to $80 in Portland and Minneapolis.
Licenses, plates, registration, and depreciation
Each state has its own structure for fees around licenses, license plates, registration, titles, emissions inspections, and more. What you pay depends on the state, but AAA found the national average in government taxes and fees on new car purchases to be $675 per year.
One final word of warning: Maybe you’ve heard the statistic that a new car loses a good chunk of its value when it rolls off the lot? AAA says that in 2022 the average new car depreciated at a rate of $3,656 per year.
If you own a car, you’ll face many of these costs, whether you use it every day or only every now and then. Luckily, options like shared bikes and scooters, e-bikes, and ridesharing have made it easier to get around town than ever before, giving people more freedom to ditch their cars and the inevitably high costs that come along with them.
The content provided in this article is for informational purposes only. Lyft makes no representations as to the accuracy and completeness of this information. Unless otherwise stated, Lyft is not affiliated with any businesses or organizations mentioned in the article.