Owning a car in America is an almost unavoidable necessity for most Americans, whether for commuting to work, meeting family needs, or managing everyday life. Yet, with the continuous rise in insurance premiums, fluctuating fuel prices, and growing maintenance and repair costs, drivers are facing a heavier financial burden just to keep their vehicles on the road. Even states still considered “cheaper” have not been spared from annual cost increases.
Data shows that 91.7% of American households owned at least one car in 2022—the latest year with official statistics—while the number of registered vehicles, both personal and commercial, reached about 278.9 million. While the purchase price of cars usually attracts the most attention, there are also “hidden costs” that weigh heavily on car owners.
According to a Bankrate analysis, these hidden costs—which include insurance, fuel, maintenance, and vehicle taxes—averaged $6,894 annually (about $575 per month), excluding loan or lease payments. These costs increased by 3.1% between 2024 and 2025, surpassing the current inflation rate.
The Most Expensive States
Florida topped the list of the most expensive states for car ownership, with hidden costs reaching $8,483 annually, a 3.5% increase from last year. Insurance is the main factor, averaging $3,874 per year, the third highest in the nation. Fuel, maintenance, and taxes remain near national averages.
Nevada ranked second with $8,342 annually ($695 monthly), largely driven by a sharp 18% jump in insurance premiums within a single year. Louisiana followed closely with $8,254 annually, burdened by the second-highest insurance premiums in the U.S., averaging $3,953, despite relatively low vehicle taxes.
The Cheapest States
On the other end, New Hampshire was the least expensive state for car ownership, with hidden costs of just $4,472 annually ($373 monthly). This is supported by the absence of sales tax on vehicles and one of the lowest insurance averages nationwide at $1,716.
Washington ranked second at $4,744 annually, followed by Alaska at $5,131. Despite lower taxes, both states saw notable insurance hikes of 12%, contributing to cost increases of 7.2% in Washington and 6.9% in Alaska.
Breakdown of Costs Nationwide
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Insurance is the biggest expense, averaging $2,679 annually, or 39% of total costs. The highest insurance states are New York, Louisiana, Florida, Nevada, and Michigan, while the cheapest are Idaho, Vermont, Maine, Hawaii, and Indiana.
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Fuel averages $1,650 annually, based on 13,662 miles of driving per year. Wyoming leads with the highest fuel costs due to longer average driving distances (21,575 miles annually). The lowest fuel spending is found in Washington, D.C., Rhode Island, and New York.
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Maintenance and repairs rose to $1,384 annually, up 3.6% from 2024. Factors such as weather, road quality, and local labor costs drive these differences. Wyoming tops the list at $1,985 annually, followed by Mississippi ($1,748) and Missouri ($1,744).