- Drivers underestimate annual ownership costs by $4,565.
- Gas and insurance eat the biggest chunk of the budget.
- Younger owners spend $10k yearly keeping cars running.
Car ownership has always been a little like adopting a pet. You budget for food and the occasional wash and blow dry and then Rover goes and swallows a load of lithium batteries and shotgun shells requiring an emergency trip to the vet and your math goes out the window.
A new study says drivers are also underestimating what their cars cost, and not just by a few bucks here and there. It reckons the privilege and convenience of owning a car could be costing them more than $4,500 a year above what they envisaged.
Related: Driving Costs Got Cheaper But It’s Not All Good News
Synchrony’s Cost of Car Ownership survey found owners think they spend about $2,738 annually on upkeep, excluding loan and lease payments. The actual total averages $7,303. That’s a 167 percent or gap, which means Americans are doing their sums with blind optimism instead of a calculator.
The biggest culprits aren’t shockingly exotic. Gas is cheap right now, but still averages $1,956 a year and insurance runs about $1,730, the study says. Maintenance adds $622, service and repairs $659, tires $377, and parts and accessories $240. Toss in the little stuff like parking, tolls, and car washes and suddenly your supposedly cheap commute in a four-cylinder economy car is eating your wallet like a V8.
Younger Drivers Pay More
Younger drivers are getting hit especially hard. Synchrony says Millennials spend about $10,101 per year and Gen Z is right behind at $9,984. They also spend more monthly on gas, tolls, parking, and car washes, which suggests they’re either driving more, paying more, or just living in places where everything costs extra.
Average Annual Running Costs
Synchrony
Break it down further and the gap widens. Gen Z drivers report spending $976 a year on maintenance and $983 on service and repairs, while Millennials spend $768 and $931 in those same categories. Both figures sit well above the overall averages of $622 and $659.
On a monthly basis, Millennials average $207 on fuel and Gen Z $193, compared with the $163 overall figure. They also outspend the average driver on tolls, parking, and even car washes.
Slimming Down The Fleet
The survey also claims multi-car households are shrinking. Most respondents said they manage just one vehicle, and fewer report running two. When the price of everything climbs, that second set of keys starts looking more like a luxury than a convenience.
Specifically, 65 percent of respondents said they are responsible for a single vehicle, and only 25 percent manage two. Those shares trail 2023 U.S. Census data, which found 37 percent of households had two vehicles and 22 percent owned three or more.
AAA’s numbers published in its own, different report add an interesting counterpoint. Its 2025 Driving Costs study put average ownership cost for a new vehicle at $11,577 per year, including bigger ticket items like depreciation and finance charges. That overall figure is over $4,200 more than Synchrony’s $7,303, but Synchrony’s doesn’t include loan and lease payments, which for one in five new car buyers means a monthly bill of over $1,000.
Though it looks high, the AAA’s number, which averages at $965 per month, is actually down $719 on last year.
Are you underestimating your annual car costs by the kind of money that’d buy a used Miata? Drop a comment below and let us know.
