10 States With the Cheapest Annual Car Costs

It’s no secret: Car ownership in America isn’t exactly cheap, especially when it comes to new cars. Aside from the national average cost of one year of auto financing payment (around $9,228) and the average 20% down payment on MSRP ($9,745), owning a car for just a year can be rather pricey. Car owners have to contend with state sales taxes in specific and tax costs in general, car insurance premiums, the cost of gas per gallon and yearly repair costs.

Those costs, however, can vary from state to state. Specifically, state sales taxes and gas prices can shift wildly from state to state, and cost-of-living differences in each state also can impact car and car repair prices. As such, there are a number of states in which annual car costs are far more affordable than others. Check out which states are the easiest and most affordable to own a car.

• Total annual cost: $25,239
• Annual car repairs: $417
• Annual insurance premium: $2,337

• Total annual cost: $24,970
• Annual car repairs: $401
• Annual insurance premium: $1,469

• Total annual cost: $24,914
• Annual car repairs: $380
• Annual insurance premium: $2,138

• Total annual cost: $24,651
• Annual car repairs: $403
• Annual insurance premium: $1,741

• Total annual cost: $24,190
• Annual car repairs: $399
• Annual insurance premium: $1,860

• Total annual cost: $23,624
• Annual car repairs: $390
• Annual insurance premium: $2,193

• Total annual cost: $23,583
• Annual car repairs: $394
• Annual insurance premium: $1,678

• Total annual cost: $23,518
• Annual car repairs: $387
• Annual insurance premium: $1,676

• Total annual cost: $23,504
• Annual car repairs: $391
• Annual insurance premium: $2,063

• Total annual cost: $22,760
• Annual car repairs: $371
• Annual insurance premium: $1,265

Methodology: To generate these rankings, GOBankingRates surveyed and totaled the cost of buying and owning a car for one year in all 50 states. This total included four key car expenses: (1) Car sales tax, based on rates provided by PolicyGenius for the average car transaction amount of $48,724 in November 2024 (as reported by Kelley Blue Book); (2) average annual car insurance premiums, sourced from CarInsurance.com’s 2024 report; (3) average annual gas expenses, based on AAA’s Fuel Gauge Report on Dec. 11, 2024, and the assumption of filling up a 14-gallon tank once a week; (4) average annual car maintenance and repair costs, sourced from CarMD’s 2022 State Repair Cost Rankings. These expenses were combined with the cost to finance a new vehicle — based on $48,724 MSRP, 20% down payment of $9,745, average credit score of 716 and interest rate of 6.48% (sourced from Experian loan length of 60 months, which equals $9,228 per year) — to determine the cost to own a car for a year. All data is up to date as of Dec. 11, 2024.