Avoid Buying a Car in These 10 States Where Ownership Is More Expensive
Written by
Josephine Nesbit
Edited by
Nicholas Morine
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Car ownership is more than the initial purchase price. There are also state sales taxes, insurance premiums, gas and repair costs to keep in mind. These costs also vary by state, and car ownership may be a much bigger financial burden in some areas of the country than others.
To determine the most expensive states to own a car, GOBankingRates surveyed and totaled the cost of buying and owning a car for one year in all 50 states. This included car sales tax, average annual insurance premiums, average annual gas expenses and average car maintenance and repair costs.
These expenses were added to the cost of financing a new vehicle based on a $48,427 MSRP, a 20% down payment of $9,649, an average credit score of 716 and an interest rate of 6.88% as sourced from Experian — as well as a loan length of 60 months. This totaled $762 per month or $9,144 per year.
Here’s a breakdown of the total cost of car ownership in the most expensive states. The results are in reverse order, with the most expensive appearing last on the list.
10. Kansas
Total cost: $26,409
- State sales tax: 7.5%
- Average insurance: $1,594
- Annual gas: $2,029
- Average repair costs: $374
Although Kansas has cheaper gas prices, the state’s high sales tax eats into any cost savings. Kansas’ sales tax adds around $3,619 to the cost of a new car.
9. Connecticut
Total cost: $26,434
- State sales tax: 6.35%
- Average insurance: $1,750
- Annual gas: $2,408
- Average repair costs: $418
Connecticut has some of the priciest maintenance and repair costs in the nation, especially for car parts. The state’s sales tax also adds up to around $3,064 in the first year to the cost of car ownership.
8. Michigan
Total cost: $26,434
- State sales tax: 6.00%
- Average insurance: $2,133
- Annual gas: $2,257
- Average repair costs: $356
Gas prices may cost less — about $3.10 per gallon — but the average car insurance premium is much higher compared to other states. The state’s sales tax adds up to $2,895.
7. New Jersey
Total cost: $26,614
- State sales tax: 6.63%
- Average insurance: $1,901
- Annual gas: $2,321
- Average repair costs: $400
New Jersey’s sales tax of 6.63% increases car expenses by nearly $3,200 in the first year. Repair costs and insurance premiums are also higher in this state.
6. Illinois
Total cost: $26,640
- State sales tax: 7.25%
- Average insurance: $1,578
- Annual gas: $2,391
- Average repair costs: $379
With such a high state sales tax, Illinois car owners pay close to $3,500 in the first year of owning their cars. However, car owners pay hundreds of dollars less in car insurance premiums than in other states on this list.
5. Rhode Island
Total cost: $26,758
- State sales tax: 7.00%
- Average insurance: $1,845
- Annual gas: $2,355
- Average repair costs: $387
Rhode Island is another pricey state on the East Coast. The state’s sales tax adds almost $3,400 to the total, and residents also pay more in car insurance.
4. Washington
Total cost: $26,805
- State sales tax: 6.5%
- Average insurance: $1,371
- Annual gas: $3,112
- Average repair costs: $392
Not only do car owners in Washington pay a higher state sales tax, but gas prices are also much higher than in other parts of the country. A 6.5% sales tax adds around $3,136 to the first year of car ownership.
3. Florida
Total cost: $26,819
- State sales tax: 6.00%
- Average insurance: $2,560
- Annual gas: $2,175
- Average repair costs: $396
On top of paying a sales tax rate of 6%, or $2,895 for a new car, Florida has some of the highest car insurance premiums in the country.
2. Nevada
Total cost: $28,135
- State sales tax: 8.25%
- Average insurance: $2,023
- Annual gas: $2,940
- Average repair costs: $398
The state sales tax in Nevada even beats the No. 1 spot on this list. With a tax rate of 8.25%, Nevada car owners pay nearly $4,000 on their new car purchases. Filling up at the pump is also pricey, costing almost $3,000 yearly.
1. California
Total cost: $28,253
- State sales tax: 7.25%
- Average insurance: $2,115
- Annual gas: $3,431
- Average repair costs: $416
California is by far the most expensive state to own a car. The three biggest costs for car owners in this state were sales taxes (almost $4,000), gas ($4.71 per gallon) and repair costs for both parts and labor.
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