CHICOPEE, Mass. (WWLP) – A new report from AAA found the average yearly cost for a Massachusetts resident to own and operate a new vehicle in 2022 is $10,728 a year, or $894 a month.
In 2021, the average yearly cost was $9,666, or $805.50 per month. AAA says the most significant cause of an increase this year is the rise in gas prices. Massachusetts residents are also paying more than the national average, about $250 more, due to more expensive finance charges, costlier repairs and maintenance, elevated gas prices and higher taxes and fees.
“Consumers are paying more attention when purchasing a new vehicle since everything is more expensive right now,” said Mary Maguire, AAA Northeast Director of Public and Government Affairs. “With the recent increase in fuel prices, more and more people want to know the true costs of owning a car beyond their monthly payment.”
The report evaluated nine categories of vehicles to determine the average annual operating and ownership costs. The study also assumes over a five-year ownership period, the vehicle is being driven at least 15,000 miles a year.
Gas prices have been increasing since early March and was a big factor in drivers decision to switch to an alternative way to commute. A recent AAA consumer survey found gas prices to be the main reason Americans are seriously considering switching to an electric vehicle.
Electric vehicles are the second lowest annual ownership costs behind small sedans, according to AAA. In comparison, an electric vehicle costs 4 cents a miles to charge a vehicle at home versus 18.4 cents a mile for a gas-powered vehicle to fuel up. Electric vehicles also have the lowest maintenance, repair and tire costs. Electric vehicles do not need oil changes, air filter replacements and mechanical inspections and there are federal and state rebates available to buyers.
AAA offers the following steps to anyone looking to buy a new vehicle:
- Start early! Due to limited inventory, consumers may have fewer choices regarding a specific vehicle model. They may have to wait for delivery or even pre-order the vehicle of their choice.
- Obtain pre-approval from their financial institution (e.g., Bank, Credit Union, AAA, etc.) before discussing finance rates with the car dealer. By getting pre-approval, they will have a threshold of the best lending rate they’ll pay. Buyers can use their pre-approval to negotiate if the dealer offers a higher rate.
- Create a budget and factor in the different elements of ownership before purchase – not just monthly payments. Other factors to consider when making the budget include insurance, gas, routine maintenance, etc.
- Typically, three negotiations occur when purchasing a vehicle – the cost of the car, the finance rate and the trade-in value. Keep each transaction/negotiation separate from the other.