AAA Says Average Driving Cost Was 56.2 Cents Per Mile for 2004

The average cost of driving a new passenger car in 2004 was 56.2 cents per mile or $8,431 per year, AAA's annual Your Driving Costs study showed. AAA has reported on the average estimated cost of owning and operating a new car each year since 1950.

In 2004, AAA revised its methodology for calculating driving costs to better reflect the average AAA member's use of a vehicle over five years and 75,000 miles of ownership. This means the estimated costs for 2004 were similar, but not directly comparable to costs reported by AAA in previous years.

The largest component of vehicle cost is vehicle depreciation. AAA estimates the average new car will depreciate $3,782 per year of ownership. The second biggest expense is full insurance coverage estimated to average $1,603 per year. The cost of fuel is the third largest expense incurred by vehicle owners. AAA estimates vehicle owners will pay about $975 per year for fuel.

Routine maintenance - including the manufacturer's recommended maintenance operations and tire expense - is estimated to cost $915 per year. AAA calculates typical finance charges are $741 per year based on a 5 year loan at 6 percent interest with a 10 percent down payment. The IRS tax allowance for business mileage has never allowed full reimbursement of all expenses associated with automobile ownership and use.

AAA's cost figures are based on composite national average of three domestically built 2004 cars - a subcompact Chevrolet Cavalier LS, a mid-size Ford Taurus SEL Deluxe and a full-size Mercury Grand Marquis LS.

These similarly equipped vehicles include air conditioning, automatic transmission, power steering, AM/FM stereo, dual air bags, antilock brakes, cruise control, tilt steering wheel, tinted glass and a rear-window defogger.

Note: This article was reprinted with permission from the California State Automobile Association (CSAA) © 2004.