Average Cost of Owning and Operating an Automobile, 1975-2020

Average Cost of Owning and Operating an Automobile, 1975-2020

Source: Bureau of Transportation Statistics, National Transportation Statistics, Table 3-17. Assumes 15,000 miles of driving per year. Figures are in 2020 dollars.

The costs of using the automobile can be divided into three categories:

  • Internal variable costs. These costs vary according to the amount of travel. They include gasoline, maintenance, and tires.
  • Internal fixed costs. Mainly related to vehicle ownership and parking fees. Also include depreciation, insurance, finance charges, license fees, registration, and taxes.
  • External costs. Not assumed by individual users but by the collectivity (not shown). They mainly involve road provision costs and are estimated to add about 30% to the total costs.

Adjusted for inflation, the costs of owning and operating an automobile have not significantly changed, underlining that car technology and performance improved. What has changed is the composition of these costs. While variable costs accounted for 45% of the ownership costs in 1975, this share was 32% in 2020. The main reasons behind this change are higher insurance and registration fees as well as the usage of more financing for the purchase of vehicles. Maintenance costs are higher because vehicles last longer and are much more complex mechanically and electronically.