What's the cost of owning a car?
Owning a car is seen as a source of pride and accomplishment in the United States. For most, it is a significant rite of the passage into adulthood. But there is a wide disparity among Americans as to who can afford a new car from the dealership, or purchased one used, or even own a car at all. Effective public transportation is virtually non-existent, or limited by a weak infrastructure, in most American cities. Despite the rise in popularity and availablity in rideshare apps and programs, it is not enough to keep up with the demand and value of car ownership.
Here, you will find major data points regarding the usage and ownership of automobiles in America by race, gender, location, and class. These data points are either taken from reputable sources such as the Bureau of Labor Statistics and the research company, Hedges & Company. Additional data is provided by The Zebra's proprietary surveys and its internal quotes engine.
Table of contents
- Cost of car ownership in 2020
- Cost of car ownership in 2019
- Car ownership statistics in the United States
- Death statistics by car type
- Car ownership and poverty
- Car ownership by age
- Car ownership in the United States by race
- Car ownership by state
- What's the cost of car ownership in the US?
- Cheapest car to own
- Owning vs. leasing a car
- Electric car ownership statistics
- Luxury car ownership
- Car ownership and insurance
The general pattern of car buying and selling has been disrupted significantly due to the global coronavirus pandemic. In late 2020, The Zebra surveyed 1,500 Americans to obtain a deeper understanding of their attitudes about owning a car.
As was the same with the study last year, most Americans believe car ownership is still necessary.
- 77.3% of respondents think owning a car is necessary, despite the evolution of rideshare.
- 22.7% said no, owning a car was not necessary.
- This is a 22.7% increase of those believing strongly in car ownership from last year's survey.
This survey also revealed a lack of understanding about what goes into car ownership. After purchasing a car from somewhere other than a dealership, the first step is to take the signed title to the DMV. We asked the question, "after buying a car from someone other than a dealership, what do you do with the signed title?"
- 57.4% correctly answered the question.
- 5.7% responded, "Never take it out of the glove box."
- 2.4% said, "Send it back to the buyer with your signature."
- But 33.4% said none of these options were the correct next step.
When asked, "what is a car title?", respondents said:
- A document proving auto insurance (4.6%)
- The make and model of a car (5.5%)
- A document that indicates ownership (89.9%)
Additional questions in the survey looked to identify any buying habits prior to COVID-19. When it comes to buying a car, people responded as such:
- 5.8% of respondents prefer to buy from a family member or friend.
- 8.6% prefer to shop online.
- 10.7% have never purchased a car.
- 13.5% buy from a private seller.
- 61.4% of car buyers prefer to buy from a dealership.
Based on this data, we found it necessary to investigate when the last time a new car was purchased for the average American, as the pandemic might have affected purchasing habits.
- 51.6% of people said it had been more than a year since they purchased a new car.
- 8.9% said they had never puchased a new car in their lives.
- 2.0% responded with having purchased a car within the last month.
Despite purchase activity being wildly variant, many Americans share similar experiences when it comes to their first car:
- 33.0% had old beaters they purchased as their first cars.
- 31.3% were given their first cars as a hand-me-down from an older sibling or parent.
- 13.9% purchased a newer car themselves for their first car.
- 7.9% were gifted a newer car from family or friends.
What was the condition of your first car?
|Hand-me-down from family||31.3%|
|Old beater you purchased||33.3%|
|Nicer car as a gift||7.9%|
|Nicer car you purchased||13.9|
|Never owned a car||1.8%|
|None of the above||12.2%|
Is owning a car really necessary in America today? A nationwide survey conducted by The Zebra shows the majority of people believe it is, despite the availability of other options like public transportation and ridesharing.
- 63% of people said yes, owning a car was necessary for easy living.
- 14% said no, public transportation was easier and cheaper.
Some respondents mentioned the downsides of driving, including the inability to drive due to disabilities or the inconvenience of public transportation in major cities.
Another respondent said, "I like to have access to go when I please, leave when I please, and not be depend on various strangers driving me around."
Other interesting findings from The Zebra's driving and transportation survey:
- 17.4% said they did not have access to a personal vehicle.
- 38.1% of respondents said they never used public transportation.
- 57.3% of respondents said they could not get to work easily without their car.
Reported car ownership by gender in 2019
- More men than women reported having access to a personal vehicle.
- Men were more likely than women to report they could get to work easily without a personal vehicle.
- Women are less likely to take public transportation than men.
|20.5%||14.6%||Reported access to a personal vehicle|
|22.6%||21.2%||Reported access to work without a personal vehicle|
|34.9%||41.0%||Never use public transportation|
Reported use of public transportation by age group in 2019
The majority of survey respondents said they use some form of public transportation. Of these respondents:
- 30.4% Gen Z-ers (aged 18-24) reported using public transportation for any distance too far to walk.
- 45.5% Millennials (aged 25-34) reported never using public transportation at all.
- 7.1% Baby Boomers (aged 55-65+) reported using public transportation to reduce air pollution and traffic.
According to the Federal Highway Administration, in 2018, more trucks were owned by Americans than cars, buses, or motorcycles. Buses make up less than 10% of all state motor-vehicle registrations in 2018. For further insight, consider the FHA data below:
|Private/Commercially Owned||Publicly Owned||Total|
The following is derived from a variety of sources, including Edmunds.com, Hedges & Company, and the Bureau of Labor Statistics.
- From 1960 to 2010, the percentage of households owning zero cars in the U.S. dropped to 8.9% from greater than 20%.
- From 2012 to 2019, the number of registered vehicles in the U.S. decreased by more than 27.3 million.
- 6% of all U.S. households lease one or more cars.
- In 2001, Baby Boomers alone were responsible for just 39% of all new car purchases.
- On average, 62% of all new cars purchased in the United States are bought by elderly drivers aged 55 to 75.
- In 2015, the average buyer of a new car earned about $80,000 per year, according to the National Automobile Dealers Association.
According to a recent study by the Insurance Institute, fatalities in cars were the highest of all.
Death rates are per million registered vehicle years, as indicated.
- Cars — 48 million
- Pick up trucks — 29 million
- SUVs — 25 million
- Minivans — 22 million
The same study looked at the car makes and models with the highest and lowest driver death rates.
Cars with the lowest death rates
|Make/Model||Number of driver deaths per million registered vehicle years|
|GMC Yukon XL||0|
|Land Rover Range Rover Evoque||0|
|Lexus NX 200t||0|
|Lexus GX 460||3|
Cars with the highest death rates
|Make/Model||Number of driver deaths per million registered vehicle years|
|Nissan Versa Note||0|
|Lexus GX 460||3|
- In 2006, 22% of low-income adults reported having no access to a vehicle.
- In 2016, 20% of low-income adults reported having no access to a personal vehicle.
- In 2018, researchers at UCLA reported the biggest factor in declining public transportation usage was overall increased car ownership among lower-income residents.
- Researchers tied this increase in car ownership to the migration of low-income families to cheaper suburbs with limited public transportation options.
- The Panel Study of Income Dynamics, beginning in 1968, found that households with access to a personal vehicle were wealthier than those without.
- The Panel Study of Income Dynamics also found that in 1955, those with cars had twice the amount of income as those who didn’t. Nearly sixty years later, data show car owners made nearly three times as much as their non-owner counterparts.
- Despite this increase in low-income car ownership, the average cost of an auto loan has increased for the past six-plus years, according to the Federal Reserve Board of New York.
- Steven Raphael and Alan Berube at UC Berkeley found five of the 10 cities with the highest percentage of residents without cars were located on the East Coast:
Medicaid and exempt status
According to AARP, 20% of all Americans are on Medicaid. 39.7 million Americans in total are living below the poverty line. Medicaid is an incredibly important program for the millions of Americans struggling to meet basic needs. Discover what is exempt from the standardized income levels before you need it.
- A single vehicle is often excluded from the $2,000 limit on assets mandated by Medicaid. The car must fit into one of five categories to be considered exempt.
- Category 1-4: The automobile is needed for daily activities such as transportation to and from medical appointments.
- Category 5: The vehicle is transferred to a spouse. This is especially true where the person lives in a community property state. The value of the vehicle is not important to the exemption status, as long as the transfer is not considered to be an unqualified transfer under Medicaid rules.
- The vehicle is considered non-exempt when a Medicaid client owns a vehicle that does not fall into one of the five exemption categories listed above. Any value above $4,500 is counted toward the $2,000 total assets limitation.
If public transportation or ridesharing are not viable options and you or a loved one are in need of additional assistance getting around, consider the following organizations for aid for those without a personal vehicle. See also the Medicaid exempt rules for car ownership below.
- Organizations that Give Away Free Cars
- Rural Health Information Hub
- Good News Garage
- Rural Transportation
- Rural Community Transportation
In 2018, the most recent data from the Federal Highway Association identified the age group of 55-59 year olds as being the population with the highest percentage of licensed drivers for both males and females. The population with the lowest percentage of licensed drivers are drivers 85 and older. The below data is taken from the Office of Highway Policy Information.
|19 and Under||3.94%||3.8%|
|85 and older||1.64%||1.9%|
For a deeper investigation of these age-specific statistics, please review the full reports at J.D Power and Associations, Hedges & Company, and the Federal Highway Administration.
- According to J.D. Power and Associates, in 2000, the average age of new-vehicle buyers was 43. Nine years later, the average age was 49.
- Between 2000 and 2015, the share of new vehicles bought by those aged 16 to 34 fell by about 6%, according to Hedges & Company.
- In 15 years, the share of new vehicles bought by those aged 35 to 49 decreased by 9%.
- Today, thoseaged 16 to 34 are the least frequent buyers of new vehicles. This (along with another economic and cost factors) aligns with research conducted by the Federal Highway Administration, which found the share of American 16-year-olds with driver’s licenses was roughly 25% in 2014, a significant drop from about 46% in 1983.
- The average age of new vehicle buyers increased by almost seven years between 2000 and 2015, cites Hedges & Company. Some of that increase reflected the aging of the population, but it also reflected changes in buying patterns among people in different age groups.
Formore information on the statistics surrounding car ownership and race, consider reading more at UC Berkeley News, Governing.com, and the University of Michigan.
- Researchers at UC Berkeley found in 2006 black households were much less likely to own a car than were white households, identifying a growing gap between car ownership in white and black households that spanned income levels.
- 19% of African Americans reported living in a household without access to a vehicle.
- 4.6% of White Americans reported living in a home without access to a vehicle.
- 13.7% of Latino households reported not having access to a vehicle.
- White Americans comprised 64.7% of U.S. car buyers in 2015.
- In 2015, Hispanic buyers accounted for 12.2% of U.S. car buyers.
- That same year, the purchasing power of African- and Asian-Americans combined made up less than 15% of total car buying power in the U.S.
The Federal Highway Administration has the most recent registration data nationwide, starting in 2018. According to the data, Texas and California have the highest percentage of all vehicles which, as these are the two largest states, follows population trendlines.
Motor-vehicle registrations by state as percentages of all registrations
According to the Bureau of Statistics Consumer Expenditures Survey in 2017, it costs $9,576 per year to own and operate a licensed vehicle in the U.S. The previous figure includes a cost of $4,054 to purchase the vehicle, $1,968 in gasoline and motor oil expenses, and $3,554 in other vehicle-related costs.
- An analysis of car ownership done by the American Automobile Association (AAA) found average annual costs of $8,876 to own and operate a car.
- The AAA figure — with inflation incorporated — adds up to $443,800 over 50 years.
- In 2015, the average American spent 15.9% of their income on transportation, dedicating funds to buying, maintaining, and fueling their vehicles.
Before purchasing a car, consider depreciation, interest on your loan, additional taxes and fees, insurance premiums, fuel costs, yearly maintenance, and out-of-pocket repairs.
Compact cars have the lowest cost of ownership, according to an analysis conducted by Kelley Blue Book.
- Maintenance is a huge factor when considering the lowest cost of ownership for used cars. The Toyota Camry is a roughly more expensive purchase than the Mazda6, but it is also $2,000 cheaper to maintain.
- A Dodge Journey ($23,425 MSRP) is a more affordable purchase than a Toyota Highlander ($31,830 MSRP), but overall, owners will spend about $5000 maintaining the Highlander over the Journey.
Cox Automotive and Hedges & Company were the original sources of these statistics, taken from various research such as the Automotive Trends report compiled by Hedge & Company.
- A recent study by Cox Automotive shows new vehicle lease originations increased from just over 1 million to nearly 4.5 million in the seven years between 2009 and 2016.
- Vehicle leases comprised more than one-third (31.9%) of all new car transactions in 2016, and 31.1% of such transactions in Q1 and the first half of Q2 in 2017 (Source: 2017 Used Market Car Report.)
- Nearly one-third of millennials chose to lease their cars rather than buy in 2016. This age cohort made up 12% of all leases in the US.
- The following is a breakdown of income brackets with the percentage of those income levels that lease a car:
- Household income under $25,000 — 4%
- Household income $25,000 to $50,000 — 5%
- Household income $50,000 to $100,000 — 10%
- Household income $100,000 and up — 13%
Electric vehicle ownership increases by the day. The following statistics are taken from recognized authorities such as CBT News, CBS, and the World Atlas.
- In 2017, an estimated 3.1 million electric vehicles were on the road globally, up 54% from 2016.
- The United States has the second-most electric vehicle owners among all countries (762,000).
- Electric vehicle sales in the United States in 2018 numbered 361,307, nearly doubling the 2017 total.
- According to the International Energy Agency, by 2030, there will be 125 million electric vehicles operating globally.
- Tesla sold 139,782 units of the Model 3 in 2018. This accounted for almost half of all plug-in vehicle sales.
- The Toyota Prius Prime was the second-best-selling electric car of 2018, with nearly 30,000 units sold. The Chevy Bolt made the top 10 list but was well behind the market leader, with just 18,019 sales in 2018.
According to Edmunds.com, luxury cars account for 18% of all car sales revenue, contributing more than $100 billion to the market.
- Most wealthy American drivers do not own luxury cars: in fact, 61% of car buyers with household incomes of $250,000 or more don’t own a luxury car, according to Money Under 30.
- The age group most likely to purchase a luxury car in 2014 was the 18-to-34 cohort, which comprised 45% of luxury vehicle buyers.
Insurance is a major contributor to auto-related costs. While you might save some money on the original purchase by purchasing a used car, you could shell out extra money each month because of your insurance company’s concerns about ongoing repairs.
Here's a look at monthly insurance costs as a portion of the true cost of car ownership.
Lower the cost of your car ownership in a few clicks!
FAQs about the cost of car ownership
How much does it cost to own a car per year?
The average cost of car insurance per year is $1,548. However, insurance is just one of many annual costs for car owners. Others include maintenance, fuel, tires, and depreciation. Total costs are estimated to be $10,000 on average.
What car has the lowest cost of ownership?
In general, compact cars have the lowest cost of ownership. A major factor when considering total cost is a car's required maintenance, as it differs model to model.
How much does it cost a car manufacturer to make a car?
Manufacturing costs differ by company and car. As an example, a Toyota that sells for $15,000 has a manufacturing cost of $12,500. In comparison, a Porsche that costs $150,000 in the showroom has a manufacturing cost of $133,000.
How long should you own a car?
In the United States, car owners keep their cars for an average of 11.5 years. This is due to the increased reliability of modern vehicles.
- US Vehicle Registration Statistics
- Bureau of Labor Statistics
- Cox Automotive
- World Atlas
- UC Berkeley News
- Hedges & Company
- University of Michigan
- Money Under 30
- CBT News
This study was conducted for The Zebra using Google Consumer Surveys. The sample consisted of no less than 1,000 completed responses per question. Post-stratification weighting has been applied to ensure an accurate and reliable representation of the total population. This survey was conducted in June 2020.
Copyright © 2020 InsuranceZebra, Inc. All rights reserved. For inquiries regarding this content, please contact our team at firstname.lastname@example.org.