Photo: Nashville, Tennessee
Photo Credit: Ken Lund / CC
Published September 1, 2021
By Samuel Stebbins [24/7 Wall St. via The Center Square] –
Car prices are surging in the United States. Rising demand, in conjunction with a limited supply of new vehicles on dealer lots, has led to a 45% increase in the consumer price index for used vehicles since June 2020. Perhaps now more than ever, car buyers should bear in mind that the cost of vehicle ownership goes well beyond sticker price.
These costs are not uniform across the country, however, and in some states, motorists can expect to spend thousands more per year than in others.
Between insurance, fuel, and maintenance and repairs, the typical motorist in Tennessee can expect to spend about $2,585 per year on vehicle ownership at the 15th lowest annual cost estimate among states. Nationwide, the average cost is about $2,807.
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One of the largest drivers of vehicle ownership expenses is insurance, and just as the overall cost of ownership in Tennessee is lower than the national average, so too are insurance costs. The average annual insurance payment for a single, 40-year old male with a clean record and good credit in the state is $1,206, compared to the national average of $1,428.
Estimated annual driving costs at the state level were calculated based on the average cost of insurance, gasoline, and repair when the check engine light comes on. Data on the average cost of repair, including parts and labor, came from automobile software developer CarMD. Data on the average annual insurance costs by state came from car review website insure.com and are based on full coverage for a single, 40 year-old male with a clean record and good credit and are for the 2021 model-year versions of the 20 best-selling vehicles in the U.S.
Data on average gasoline expenditure per driver was calculated using total vehicle miles traveled by state in 2019 from the Federal Highway Administration; the total number of licensed drivers; the average price of a regular gallon of gasoline by state as of July 20, 2021 from AAA; and the average fuel economy for all U.S. vehicles in 2019 from the Environmental Protection Agency.
Due to incomplete data, Alaska was excluded from analysis.
| Rank | State | Avg. annual cost of car ownership ($) | Avg. gas price as of June 20, 2021 ($ per gal.) | Avg. annual insurance costs ($) | Annual fuel expenditure per licensed driver ($) |
|---|---|---|---|---|---|
| 1 | Louisiana | 4,123 | 2.82 | 2,839 | 892 |
| 2 | Wyoming | 3,984 | 3.45 | 1,768 | 1,833 |
| 3 | California | 3,798 | 4.32 | 1,966 | 1,418 |
| 4 | Michigan | 3,471 | 3.27 | 2,112 | 1,008 |
| 5 | Florida | 3,369 | 2.99 | 2,082 | 894 |
| 6 | Missouri | 3,369 | 2.84 | 1,895 | 1,098 |
| 7 | Texas | 3,193 | 2.84 | 1,710 | 1,089 |
| 8 | Georgia | 3,161 | 2.98 | 1,705 | 1,046 |
| 9 | Colorado | 3,139 | 3.53 | 1,574 | 1,164 |
| 10 | Montana | 3,126 | 3.20 | 1,627 | 1,110 |
| 11 | Utah | 3,097 | 3.79 | 1,250 | 1,447 |
| 12 | South Dakota | 3,035 | 3.09 | 1,575 | 1,083 |
| 13 | Rhode Island | 3,029 | 3.04 | 1,801 | 840 |
| 14 | Connecticut | 2,914 | 3.16 | 1,580 | 932 |
| 15 | New Mexico | 2,896 | 3.09 | 1,391 | 1,125 |
| 16 | Mississippi | 2,881 | 2.78 | 1,378 | 1,107 |
| 17 | Maryland | 2,853 | 3.04 | 1,410 | 1,044 |
| 18 | Nevada | 2,846 | 3.89 | 1,380 | 1,070 |
| 19 | Minnesota | 2,827 | 3.00 | 1,407 | 1,049 |
| 20 | Arkansas | 2,822 | 2.86 | 1,462 | 978 |
| 21 | West Virginia | 2,812 | 3.05 | 1,299 | 1,136 |
| 22 | Oklahoma | 2,766 | 2.87 | 1,393 | 994 |
| 23 | North Dakota | 2,765 | 3.08 | 1,234 | 1,174 |
| 24 | South Carolina | 2,743 | 2.92 | 1,409 | 941 |
| 25 | Kentucky | 2,716 | 2.93 | 1,321 | 1,006 |
| 26 | Washington | 2,709 | 3.84 | 1,298 | 1,018 |
| 27 | Nebraska | 2,709 | 3.00 | 1,383 | 962 |
| 28 | Oregon | 2,693 | 3.70 | 1,229 | 1,070 |
| 29 | Kansas | 2,686 | 2.94 | 1,454 | 860 |
| 30 | New Jersey | 2,682 | 3.18 | 1,319 | 960 |
| 31 | Delaware | 2,679 | 3.00 | 1,443 | 846 |
| 32 | Alabama | 2,649 | 2.84 | 1,358 | 893 |
| 33 | Massachusetts | 2,644 | 3.03 | 1,314 | 950 |
| 34 | North Carolina | 2,605 | 2.90 | 1,326 | 876 |
| 35 | Tennessee | 2,585 | 2.88 | 1,206 | 980 |
| 36 | Arizona | 2,575 | 3.13 | 1,417 | 772 |
| 37 | Hawaii | 2,547 | 4.08 | 1,254 | 890 |
| 38 | Illinois | 2,532 | 3.40 | 1,205 | 955 |
| 39 | Virginia | 2,492 | 2.98 | 1,033 | 1,056 |
| 40 | Idaho | 2,453 | 3.67 | 985 | 1,081 |
| 41 | Iowa | 2,386 | 2.99 | 1,032 | 997 |
| 42 | Indiana | 2,370 | 3.14 | 1,189 | 823 |
| 43 | New York | 2,270 | 3.20 | 1,163 | 731 |
| 44 | Wisconsin | 2,253 | 3.02 | 938 | 965 |
| 45 | Pennsylvania | 2,248 | 3.26 | 1,028 | 841 |
| 46 | Ohio | 2,229 | 3.10 | 992 | 888 |
| 47 | Vermont | 2,133 | 3.07 | 1,151 | 640 |
| 48 | New Hampshire | 1,997 | 2.99 | 885 | 747 |
| 49 | Maine | 1,960 | 3.12 | 858 | 745 |
2 Responses
One item that was left off the list of car ownership is vehicle registration. I have lived a couple of states where registration fees are considerably more than Tennessee. Two of which are New York and Indiana. In New York You must also pay for an annual emissions test and if your vehicle fails you will need to get it fixed in a certain amount of time which in turn will cost you extra. Also vehicle registration is for for every two years based on age of vehicle. In Indiana vehicle registration is even crazier it is based on age and what type of vehicle for example a luxury vehicle will cost you a lot of money. When we left Indiana we paid over a thousand dollars to register four vehicles. When we moved here to Tennessee the same four vehicles cost us $120.00. So as you can see this also makes a difference in car ownership. In that light Tennessee should be rated well below New York and Indiana.
I need to correct my comment. I should have say well above those two states and several others.