States with the Highest Cost of Vehicle Ownership
Recent findings from a LendingTree study have shed light on the states where owning a vehicle is the most and least expensive. The analysis considered various factors, including auto insurance, repair expenses, fuel costs, and sales tax, to determine the total annual cost of vehicle ownership.
Most Expensive States
Drivers in Nevada, Florida, and Louisiana face the highest annual costs. Nevada tops the list at $6,118.86, primarily due to elevated auto insurance rates. Florida and Louisiana closely follow, with expenses of $5,681.58 and $5,663.40, respectively.
Cheapest States
Conversely, New Hampshire, Maine, and Ohio offer the most affordable vehicle ownership. New Hampshire leads the way with a minimal annual cost of $3,029.58, followed by Maine and Ohio, where expenses hover just above $3,500.
The Role of Fuel and Taxes
Fuel expenses also vary significantly by state. Wyoming, Indiana, and Mississippi have the highest annual fuel costs. Wyoming’s high fuel costs are attributed to its drivers’ high annual mileage.
Sales tax also contributes to the overall expense. Drivers in Louisiana, Tennessee, and Arkansas face the highest annual sales tax costs on cars, with Louisiana drivers paying approximately $400.13 annually. In contrast, Delaware, Montana, New Hampshire, and Oregon impose no sales tax on vehicles.
Auto Insurance: A Key Factor
High auto insurance premiums are a major driver of elevated vehicle ownership costs in several states. Nevada, Florida, and Michigan see auto insurance accounting for over half of their ownership costs (56.2%, 57.5%, and 58.9%, respectively).
Nevada has the highest annual insurance costs at $3,439. Florida and Michigan also have high premiums at $3,267 and $3,151, respectively. Maine, New Hampshire, and Vermont, which have some of the lowest car ownership costs, also have the cheapest average car insurance.
Insurance costs are affected by a variety of factors, including state-specific insurance requirements, regulations, crash rates, and the cost of medical care and vehicle repairs. For instance, Michigan and Florida require personal injury protection (PIP) coverage, which most states do not require. Furthermore, rising repair costs and medical expenses increase insurance claims, which affects the premiums drivers pay.
Vehicle Ownership Trends Over Time
Despite a steady increase in the cost of living over the past decade, the average number of vehicles per household has remained relatively consistent. According to an analysis of U.S. Census Bureau data, a slightly higher percentage of households had three or more vehicles available in 2023 compared to 2014.
