Which States Have Highest Five-Year Ownership Costs?
SANTA MONICA, Calif. — The cost to own a vehicle can vary greatly from state to state, sometimes by more than $10,000 over five years for the exact same vehicle, according to Edmunds.com, which recently investigated how expensive it is to own vehicles in specific states.
Edmunds.com research indicated that the state with the highest average five-year vehicle ownership costs is Hawaii ($51,223). California was next on the list at $50,480, followed by Alaska, Nevada and Connecticut, respectively.
Meanwhile, the lowest average expenses can be found in New Hampshire. Car owners there pay about $39,136 over five years. No. 2 on the least-pricey side was South Dakota ($40,524), with South Carolina, Wisconsin and North Dakota next in line.
Data from Edmunds.com's True Cost to Own tool was used in determining the rankings of states. The tool forecasts the model-specific regional averages for five-year ownership expenses, which consider depreciation, financing, taxes, fees, insurance premiums, gas prices, maintenance and repair costs on new and used units.
"Many new-car buyers don't think about the fact that choosing a more expensive vehicle will likely mean higher sales tax and more interest on their loans, which may drain their household budget more than expected," explained Karl Brauer, editor-at-large and senior analyst for Edmunds.com.
"People are also often surprised by differences in car insurance, fuel and maintenance costs when they change vehicles. It's always a good idea to carefully consider all aspects of vehicle ownership before making a final decision on a new car."
Specifically, Edmunds.com provided a list of the states with lowest and highest average five-year ownership costs, as of April 22.
New Hampshire: $39,136
South Dakota: $40,524
South Carolina: $40,763
North Dakota: $41,371
Edmunds.com indicated that the True Cost to Own calculations assume the following:
—Ownership expenses are for a five-year time span.
—Owners drive vehicles for an average of 15,000 miles annually.
—Traditional financing is used, not leasing.
—A 10 percent down payment is made.
—In determining the finance rate, it assumes buyers are in the "Gold" credit tier.
—Loans are for 60 months.
—When looking at insurance, it assumes that owners represent the average demographic for insurance rates.